Black Friday sales fall amid gloom
It appears shoppers may have heeded the Reserve Bank’s warning to curb spending, as Black Friday discounting failed to deliver record sales this year.
Figures from electronics payment network Worldline show spending on Black Friday was down 6.9% compared with last year, and 9.5% last week in the lead-up to Friday.
About $350 million was spent in the week ending Saturday, and $67m on Black Friday itself. When compared with pre-Covid-19 levels, however, actual spending was up 1.5%.
Retail NZ said some retailers would have been left ‘‘disappointed’’ by the result despite shops being generally very busy with shoppers out browsing the sales.
The industry membership group said the lack of sales growth this year after consecutive record sales in previous years was ‘‘not entirely surprising’’ given the pressures on household budgets.
‘‘Consumer spending has been depressed all year as we grapple with the cost of living crisis, reprioritise spending and trade down for cheaper goods,’’ said Greg Harford, chief executive of Retail NZ. The modest amount spent during Black Friday confirmed that shoppers were looking for bargains as the economy tightened, Harford said.
Reserve Bank governor Adrian Orr urged consumers to stop spending in a bid to avoid a recession.
The Reserve Bank raised the official cash rate by 75 basis points to 4.25% last week and surprised economists by forecasting the rate would peak at 5.5% next year while also predicting a further rise in inflation and a year-long recession beginning in April.
Commenting on the recession risk, Orr said the power lay in the hands of the public, who could reduce the need for an economic contraction if they collectively cut their spending and assumed inflation would fall as a result.
Retail commentator Chris Wilkinson said he believed wet weather on Saturday and downpours on Sunday had negatively affected retail sales.
A decline in purchases of big ticket items, including appliances, on Black Friday and in the lead-up to it would have dented overall sales, he said.
Auckland and Northland spent $145m, a 12% decline on last year, followed by $46.8m in Canterbury, down 9%, $37.4m in Wellington, down 10%, and $24.8m in the Waikato, down 9%. No regions recorded an increase in spending.
Spending at furniture, homeware and hardware merchants was down 20% for the week – all categories that experienced big sales lifts during Black Friday last year. Sales of clothing, footwear and apparel declined by 5%.
Worldline said the figures signalled what could be ahead for the all-important Christmas period.