The latest retail sales figures from Statistics New Zealand show retail activity fell 1.2% in the June quarter, extending the sales decline the sector has been experiencing over the past two years.
Stats NZ says 11 of the 15 retail industries it tracks had lower sales volumes in the June quarter compared with the March quarter, and the fall in sales continued the “downward trend” observed in the last eight quarters.
On a yearly basis, the June quarterly volume figures were down a further 3.6% on the comparable figures for the June 2023 quarter.
In that same period, Stats NZ’s national population data estimates the country’s population grew by 1.8% or 93,500. It means more people are spending much less than a year ago.
Stats NZ found card spending fell 0.1%, or $6.3 million during the month of July on a seasonally-adjusted basis, according to the latest data on electronic card transactions last week.
July marked the sixth month in a row that electronic spending throughout the country fell but it is also the smallest decrease in that time as well.
According to Stats NZ, the big contributors to the decline in retail sale volumes during the June 2024 quarter were:
- electrical and electronic goods retailing – down 6%
- motor vehicle and parts retailing – down 2.7%
- food and beverage services – down 1.9%
- clothing, footwear, and personal accessories – down 4.1%
“Retail sales decreased the most in the electrical and electronic goods industry and the motor vehicles and parts industry. By contrast, supermarket sales were up in the June quarter,” Stats NZ’s business financial statistics manager Ricky Ho said.
Supermarket and grocery store sales volumes, meanwhile, were up 2.1% while sales from pharmaceutical and other store-based retailing rose an even higher 3.2%.
On a retail sales value basis, the largest industry movements in the June quarter were:
- motor vehicle and parts retailing – down 4% or $155 million
- supermarket and grocery stores – up 1.5% or $99 million
- accommodation – down 6% or $83 million
- fuel retailing – down 2.3% or $58 million
- pharmaceutical and other store-based retailing – up 2.6% or $52 million
On a yearly basis, the total value of stock held at 30 June was down by 2.1%, or $197 million, to $9.2 billion compared to a year earlier.
Stats NZ said the total volume of retail sales per person fell 1.5% in the June 2024 quarter compared with March and it’s the tenth consecutive quarter to see a fall, after adjusting for seasonal effects and price inflation.
“Retail sales volumes per person have been falling for the last two-and-a-half years. The last time we saw several quarters of consistent falls was between 2007 and 2009, which coincided with the global financial crisis,” Ho said.
ANZ economists Henry Russell and Miles Workman said the 1.2% fall in retail sales volumes was slightly lower than both the 1% fall ANZ had penciled in and the market’s expectation of a fall of 0.9%.
It was still continuing the “downward slide” that retail sales volumes had been experiencing since the start of 2022.
“Overall, the level of retail spending remains very soft, and despite interest rates now heading lower, there are still plenty of headwinds, which should see weakness persist over 2024,” they said.
ASB senior economist Mark Smith said ASB expects challenging conditions for the retail sector to continue for a while yet.
“Cost of living increases are slowing, but the major handbrake on household spending is expected to be deteriorating labour market conditions,” he said.
Westpac senior economist Michael Gordon said retail sales volumes were now down 8.7% from their peak at the end of 2021.
“Retail sales have been restrained by both rising interest rates, which have squeezed the budgets of mortgaged households, and rapidly rising prices that have eaten into consumers’ purchasing power (retail spending in dollar terms is still up 4% compared to 2021),” Gordon said.
“Both of these pressures are now starting to ease, though they are likely to be replaced by concerns about job security and income growth.”
71 Comments
The food and beverage subsector is the perfect example - operates on high costs and razor-thin margins supported only by high volumes. Thousands of business operators in hospitality across NZ have been taking zero dollars out of the business and dipping into savings to support themselves and even the business.
We don't really need 200+ hospo businesses in my town of 105K, especially considering a sizeable number of these need constant infusion of low-wage migrant workers to survive.
Of the eight industries tracked by XSBI in New Zealand, five of them had productivity levels above the national average in 2023 ($102.40), led by real estate services (NZ$125.20/hour). The industry with the lowest productivity was hospitality, generating only NZ$14.30/hour.
She also said that hospitality’s underperforming productivity is bleak news for the struggling industry. New Zealand’s hospitality workforce has a higher proportion (around 30%) of short-term and temporary migrant workers than Australia (around 15%) and the UK (around 16%).
“We can see there are country-specific dynamics that might be contributing to hospitality’s overall performance.”
more affordable housing is a good thing, I am all up for it. I'd even support the idea people get bigger income, real income.
just as long as everyone fully understands what come along with dropping housing prices. 70% percent of kiwis own their own homes, many has put all their savings into the home they live. except now their wealth just vanished while some others cheers when this happens. I find it rather ironic.
Whilst Interest is a financial site, most of the comments section is trying to make it an ethics and morality site. You see, to many, when they see others do better financially, instead of trying learn and to rise themselves up, they rather try to tear the others down, by questioning their morality.
But it’s far from a purely financial site, and that’s what makes it interesting.
A wide range of social, political, economic, environmental, ethical matters are traversed in articles on this website. Obviously they usually connect in with economics, if not finance.
I guess for me the problem is that each and every first world consumer is conducting a significant amount of exploitation for their own personal benefit.
That's just deemed acceptable behaviour, and anyone profiteering over and above that is all of a sudden a baddie.
Glass houses and all that.
The two interrelate Yvil.
Most people here are successful, have money but want to maintain that wealth and their lifestyle in the LONG term.
As you get older and wealthy for longer it makes sense.
That means we have to keep the nz economy strong to maintain the value of our assets and our lifestyle.
In turn that means we have to think socially and environmentally in order to make and create wealth for the future.
So it's more than morals. It's financial sense.
Just thinking about how much money one individual can make over the next 6 months or even 2 years . Is pretty poor financial planning or investing.
Just thinking about how much money one individual can make over the next 6 months or even 2 years . Is pretty poor financial planning or investing.
You have to be trying to do both.
I.e. making sure your time is valuable today, with a longer target to make it more so in future.
But then valuing time is kinda tricky. What's an hour of time in an outdoor bathtub with a significant other worth? More than doing lame work stuff.
Speculatively priced housing is not wealth - unless you cash out of the market.
People should say ‘what is the fundamental value of the asset I own based upon historical norms’ vs ‘oh look at that large number homes.co.nz just valued my house in this highly speculative market’
You real wealth if fully invested in housing could still be 25-30% below what you think it is right now. Unless of course, you have the balls to cash out of the market and sit on the sidelines.
Yeah, so "affordability", becomes an interplay between interest rates and prices.
But, prices are also something that changes due to affordability (the cost of finance, and prices/finance costs relative to income).
So unless some other variable changes (i.e. the country empties, or we're in a permanent declined economy), we have not really addressed affordability in any permanent, meaningful way.
People got super barred up when the rates when up. As if that was permanent.
I guess at 15+ years since the last actual downturn the fact things cycle all over the place isn't something people have much memory of. Many only know winning.
The alternative take is this is permanent end of times. Which is always a possibility, but in that case house affordability will be the least of everyone's problems.
The solution .. which will be forced on us. Is to make the house price rise happen at a slower rate ... closer to inflation.
There are many reasons we will be forced to do it.. buy the way to do it willbe to make housing less attractive as an investment opportunity.
Some ways (that are becoming acceptable to society ) are.. CGT, DTIs, tax that favors other investment methods. Reduced accom allowance spend via government. Etc etc.
Those things aren't proven to do that.
A CGT doesn't stop housing booms. It arguably gets added to the selling price for the buyer to pay. But maybe we can make a case for a CGT to a) balance tax liability away from active businesses/individuals B) raise more tax overall to pay for all the stuff we're deficient in.
The DTI, again, can't see it showing to halt housing booms. It assumes the potential buyers are already maxed out.
The cheapest, best way to suppress housing inflation longer term is to give your economy a massive kick in the danglers it'll take years to recover from.
Yes you'll find them crammed four to a room in some shady rental, or crowding around the "$5 Week" specials at Pak N Save because that's all they can afford, or as OldSkoolEconomics says they are queuing up at Western Union to remit money back home - whatever is left over at the end of the week.
Of course they still get to enjoy what's left of our crumbling infrastructure, healthcare system etc, so it's not all bad news.
Have a friend who had a boarder, his Family was allowed out, wife and 2 kids, really nice, hard worker great people. he asked his host if the entire family could move into his room. He is a Quant surveyor, we need more people like him, but they are not spenders, they will probably save every $$ buy a cheap house and make sure their kids get a better life all the while going to church each sunday.
Great people BUT NOT SPENDERS
I don't blame them/fault them for wanting to improve their lot in life - but is it really good for NZ (particularly the future prospects of Kiwis born/raised here) to bring in a bunch of people who will effectively do more work for less money by undercutting local workers and artificially pumping up the supply side of the labour market (because their peasant wages are still a great deal compared to back home) and who either won't/can't spend any of what they do earn except on the cheapest essentials. Something like a quant surveyor a bit different I guess, as ultimately that is a more specialist skill set. E.g. should we say "no" to a doctor moving to NZ who lives like a church mouse? Obviously not as we need more doctors. And need as in need, not as in 'my crappy restaurant can't function economically without effective slave labour'.
Purely anecdotal but when I go to Westfield Riccarton to do the weekly shopping there appear to be many "new Kiwis" from the category above who are packed like sardines into Pak N Save and maybe Kmart - buying the cheapest of the cheap stuff - but you rarely see them purchasing in the clothing stores, electronics stores, Farmers etc.
Once again they are entitled to save their money and be frugal as they see fit. But equally I don't see why we shouldn't be able to question the overall economic value. I mean the numbers seem to bear out it isn't working.
You can also find them filling there fish buckets up the waimak (20 finned fish) and scouring the rock pools and beaches for any sealife most weekends, after it has been pillaged a rahui is announced and limits never return in full or it permantly closed
Is fishing only for Maori and white people? Sounds like you're suggesting that migrants are untrustworthy.
There's bad actors everywhere. However, there's a couple of extra factors for some cultures:
- if they've come from a place of scarcity, they're going to be more motivated to over harvest
- not everywhere has the same sorts of ecological concerns in regards to fish size, time of harvest, volume, etc
Something like a quant surveyor a bit different I guess
Not really. It still creates more supply of them, putting more downward pressure on wages than would have otherwise been the case...leads to less interest in people taking that career as wages are lower than they otherwise would have been. So, it's quite a poor outcome for NZ Inc. as a whole because it sets us in the direction of further 'shortages of quant surveyors' and that's before we get into the costs associated with educating and providing free healthcare for the 4 of them. All while we have 100's of thousands of people on Job Seeker.
Cannot find a local? Fine, let all such employers bring in whomever they want for a 50k per annum visa fee. No path to residence associated with employer.
Time for a clean out ...
Data from economist Shamubeel Eaqub showed that the number of food and beverage and hospitality businesses in New Zealand had grown more than 30 percent since 2000, on a per capita basis.
"It has also grown as a share of the economy. It's fine when things are going well, but it becomes a fight for stretched consumer dollars in a recession. Butter spread too thin…
"The reality is we have a record number of hospitality businesses in New Zealand today - too many. We've seen too much growth in hospitality businesses in the last five years relative to population. Interest rates were free, money was sloshing around in the economy.
https://www.rnz.co.nz/news/national/525922/new-zealand-s-shrinking-cafe-scene
If it's any consolation, retail spend per capita is being decimated in Aussie as well...except for one demographic, boomers. The spending of the 25-39 yo demog is absolutely dire. You might say that the boomers don't give a rats. Actually, they should.
https://www.news.com.au/finance/economy/australian-economy/graph-reveal…
If only those poor younger Aussies had a larger, wealthier, easy to migrate neighbor to escape to.
Instead they're going to have to fight it out with all these Kiwis coming over, suppressing their wages and taking jobs.
And iron ore income is going kaka in it's budgie smugglers. They're in for more debt, more taxes, and reduced services (maybe all 3).
From your link and worth emphasising:
"the recent cohort of retirees in aggregate is more affluent and has greater incomes than any generation before them, delivered to them through decades of rocketing property prices and a longer duration with which to build wealth...and they are spending accordingly.
On the other hand, in the last three years working age Australians have experienced the worst decline in real wages on record, seeing 15 years’ worth of growth erased."
On the other hand, in the last three years working age Australians have experienced the worst decline in real wages on record, seeing 15 years’ worth of growth erased."
Yes. And whose labor is expected to fund the retirements of the boomers. The Faustian pact is built on the idea that the young bucks inherit the wealth of the boomers. Not sure what the wealth actually is though. Is it real wealth or simply the 'number go up' from monetary expansion>
Hah, this is true.
Hard to think of many developed nations doing it better. The streets of many German and Italian cities are flooded with homeless, and some areas look like a mashup between skid row in LA and a refugee camp.
NZ and Aussie are just lucky there's not many places you can get here with a rubber dinghy from.
Someone would just say "I'd like a new house please" and someone else would say "sure thing".
And then 2-3 months later there would be a house there.
Kids these days. What with their electric cars and cellular telephones. In my days you'd just aspire to a chilly-bin shape FX-GT, and no one ever complained.
More bad news adding pressure for more rate cut.
The reality is, retail numbers don’t tell the whole story, much of the spending is happening overseas because there’s little excitement or attractive options to spend on here in New Zealand. Once the overseas travel trend cools off and rates drop, the property market will likely heat up again.
The solution to poor retail spending is to increase the dole to a $1000 a week. This money will be spent !!! At present the majority of our population are just saving money. Look at those selfish FHBs saving for house deposits and those grasping immigrants just saving for a hovel and their kids' education and to bring grand-dad and grand-ma to NZ. These demographics are ruining the economy. We are, after all a consumer economy.
Besides, that great Scottish economist, Kevin Bridges, has advocated this policy and they say he's up for the next Nobel Prize in economics.
The numbers in this article are grim enough as they are, even when they are expressed in misleading nominal terms.
If we were honest and made them known in real terms (IOW inflation-adjusted) it would be direct evidence of a failing and insolvent economy that is caught up in a self-induced terminal debt trap.
This result is exactly what you would expect when the entire system is set up to reward the parasitic financial economy, whilst leaving the real economy to carry the vast majority of the burden, in terms of both tax and economic rent.
There are two solutions which could solve this - sadly they are being ignored in both the articles and the discussion on this site. The corrallory could transform the NZ economy into an economic miracle within as little as one term of government.
This miracle is precisely what happened in the aftermath of the Great Depression in the 1930s in NZ, simply because we deployed the PBS, without even looking at tax reform.
#1 The PBS (Public Banking Solution)
#2 FTT (Flat rate Financial Tax)
Why on earth does FTT tax never enter the conversation here?
Because shill eCONomics rule the narrative in all Western economies, that's why. We are more than 200 years behind the times in the discussion, let alone the implementation.
Ricardo as early as 1819 explained how economic rent could rise so high that it reached a point where industrialists could not make a profit in England any longer. In those days he was talking about land rent, but the problem in NZ today is that the 'rent' is credit, which has been expanding exponentially. This is a debilitating burden on the entire productive economy.
NB - interest IS financial rent.
Why does this happen? - well because we are dumb enough to continue to grant the global privatized banking industry the privilege of creating money and credit, rather than creating it ourselves as a public utility.
Deploying the PBS, saves all manner of overhead costs - a country's productive economy booms - history has proven that nations can transition remarkably quickly into thriving creditor economies that build permanent and sustainable societal wealth.
Meanwhile, NZ is stuck in the mire of over 600% (total debt:GDP) because we swallow the eCONomics status quo narratives, hook line and sinker. When on earth are we going to become honest with ourselves and address the tragic fact, that as a nation, we are technically insolvent?
Colin Maxwell
There are a veritable multitude of definitions of 'insolvency', JC, especially in macro-economics. Notice that I used the word 'technically'.
To my way of thinking, any country that is even approaching 600% of total debt:GDP is 'technically insolvent', when it is based on perpetually spiralling total debt, and is a captive of a global neoliberal Ponzi scheme.
"We are the issuers of our own sovereign currency therefore we cannot go broke."
Good luck spinning that one to the likes of Argentina, the USSR, Zimbabwe etc.
Cheers
Colin
This miracle is precisely what happened in the aftermath of the Great Depression in the 1930s in NZ, simply because we deployed the PBS, without even looking at tax reform.
The "miracle" was that the world went to war:
- Women entered the workforce
- industry boomed, we built ships as well as the infrastructure to house up to 50,000 US servicemen and the cargo facilities for them and their equipment (as well as the income from 50,000 servicemen at a time living here)
- we fed up to 1/3 of all US servicemen in the Sth Pacific
- our food and textile exports went all over the world, while overseas production was impeded by the war
Even after the second world war, we got another boom off the back of huge demand supplying wool for the Korean War. The wool price tripled and our economy has never seen the same economic performance since.
And another boom from rapid population growth also.
We tend to think prosperity can be had by twiddling knobs and changing regulation but ultimately most of it's about the wider circumstances we inherit.
With all due respect, the progress from the PBS policy reforms that I refer to had ZERO to do with WW2 - they significantly pre-dated the war - in fact, none of the stimuli that you list applied - the economic conditions at the time were in direct contrast to your claim.
NZ's economic policy, based on creating public utility banking and finance with the liquidity it injected into the real economy, was internationally recognised as being amazingly effective at kick-starting an entire economy following a brutally debilitating depression.
Why are you deliberately trying to obfuscate my comment by attributing that progress to war, when it had zero to do with it? You may well be a fan of the neo-classical eCONomics playbook which is based on the Western robber baron private bank's ability to create money and bleed our economy in the process - I am most certainly not.
Have you ever paused your cheerleading for the status quo and stopped to consider for one moment the effect it would have if the billions that disappear overseas in completely unjustified economic rent, and into the vast pockets of the giant private banking corporations, instead remained here in the domestic economy and was invested in creating sustainable wealth for NZ society as a whole, rather than for parasitic global fatcat banksters?
I find it intriguing that in your attempted obfuscation you hide behind a nom de plume rather than posting in your real name. What do you have to hide?
I would guarantee that you have never read any of Ellen Brown's seminal books on this topic and that you are bagging a concept that you don't even understand...
'The Public Baking Solution'
'The Web of Debt'
'Banking on the People'
I suggest you do so - if enough people educated themselves we could solve more than 90% of the problems of humanity, simply by returning to proven economic and banking models that were deployed with huge success in the past.
"I have never yet had anyone who could, through the use of logic and reason, justify the Federal government borrowing the use of it's own money... I believe the time will come in this country when they will actually blame you and me and anyone connected with congress for sitting idly by and permitting such an idiotic system to continue."
- a quote from US Rep. Wright Patman - in 1941
THE ROBBER BARON STATUS QUO
When a bank provides an entity with a mortgage (say $100K) it creates only the principal which is spent and then circulates in the economy. The borrower is expected to pay back $200K over the next say 20 years but no one creates that second $100K - the interest. Instead the bank sends you out into the dog-eat-dog world to do battle against everyone else to try and bring back the second $100K.
The problem being that ALL money except coins now comes from banker-created loans, which continually inflates the money supply. Subsequently the only way to find the intertest owed on existing loans, is to take out new loans, which continually inflates the money supply.
This is the principal reason why the US dsollar is now only worth 3 cents in 100 cents, compared to when the 100% privately owned Fed was created in 1912,.
Bernard Lietaer's observation.. (quoted from p31 of 'Web of Debt').
"...greed and fear of scarcity are in fact beng continually created and amplified as a direct result of the kind of money we are using... we can producve more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all.
The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive."
.......................................................
AUSTRALIA'S COMMONWEALTH BANK ... paraphrased from Ellen Brown's work...
This was a people's bank - a public utility that deployed the PBS model. As a defacto reserve bank, it not only issued paper money, but made loans and collected interest on them. Its profits were paid to the national government and it went straight into the current account, negating the need to collect that equivalent amount in taxes.
When private banks were demanding 6% interest, the Commonwealth bank financed Australia's World War effort paying interest at a fraction of 1%.
The bank also financed production and home-building, and lent funds to local governments for the construction of roads, tramways, harbours, gasworks, and electric power plants.
Austrlia's massive Snowy River Hydro Scheme was funded without debt, simply by drawing on the national credit card. It was an enduring asset that helped to create long term wealth for the entire country - the banksters never got to take their cut or to double or even treble the end cost.
Later in the century however, the bank fell into the twentieth century global drive for privatisation, prompted by the IMF and the WTO. The model was squandered once again.
CANADA... they too squandered their highly successful PBSQuoted from p199 'The Public Bank Solution'...
The governmet of Canada devised its innovative system of state bank-created credit in the 1930s, and drew freely from it for nearly four decades of unusual prosperity, growth, and development.
Then in the 1970s Canada joined the Basel Committee of G10 countries at the BIS. A change of economic policy immediately followed, which cut the government off from its own state bank funding, subjecting it to the skyrocketing interest rates of international credit markets.
As a direct consequence, Canada is now struggling with huge debt and deficits, along with most of the rest of the Western world.
FOUR HORSEMEN
Judging by your comments I would almost bet the farm on the fact that you have never watched Ross Ashcroft's film 'Four Horsemen' .
“To really understand something is to be liberated from it. Humanity's greatest ally is the self-educated individual, who has read, understood, delays their gratification, and walks around with their eyes wide open.”
― Ross AshcroftWHY IS THE PRIVATE BANKING INDUSTRY STILL PERMITTED TO THIEVE FROM NZ SOCIETY?
Pa!nter - Could you please explain to me within the NZ context why on earth we continue to permit the neo-classical eCONomics scenario. Here we are 83 years on from Wright Patman's astute observation, and the private bankers are still robbing us blind.
Surely one of the key reasons is because people such as yourself maintain a default position which immediately bags any suggestion of meaningful economic reform, before even bothering to try understand so much as the basic mechanics of meaningful monetary reform.
It is paticularly sobering to me when this behaviour remains widespread on social media with the leading pundits sheltering behind false names and non deplumes. I use my own name - I don't hide behind any facade or take cynical pot-shots from the shadows.
Colin Maxwell
I even supply my contact number.
021 341 501
Hi Colin,
Really well formed views usually stand on their own merits, they don't require subsequent character attacks on someone critiquing them. Doing so actually reduces the validity of the points one is trying to make.
If we are forming a picture of what fuelled the NZ economy post depression, before the war, NZ devalued it's currency in the early 30s, there was somewhat of a dairy boom, and global prices for agricultural products underwent a significant recovery. Then from there, the war and subsequent after effects took over.
Highlighting this does not make one a defender of the status quo. It is additional information to consider when understanding how we got from point A to point B, when trying to promote miracle cure-alls.
I repeat - I post under my real name, whereas you Pa1nter, hide behind a nom de plume, and yet somehow it is me who is guilty of "character attack"?
For all I know a commenter operating under a nom de plume could just as well be a bot or a troll, and so I ask the valid question, who/what is this character that I am accused of attacking?
Surely "really well-informed views" should be made in the spirit of disclosing who is putting forward these views, if they possess the courage to stand behind their convictions.
Just imagine where society would be today if all political discourse was conducted by entities who withheld both authorship and agency - oh wait, we are already there.
This is yet another reason that the entire Western world is in the giant debt-trap pickle it is in today, despite us living in the age of information.
Your responses to me, as a very new commenter, reek of hypocrisy. I cannot help but suspect that this is an organised attempt at discrediting newbies who dare to challenge certain prescribed narratives.
Colin Maxwell
Again Colin, as with our other discussion, most of your response to me ignores the subject at hand, focusing instead on assumptions about my beliefs and character.
What those are, and what my birth name is, should be irrelevant. For what it's worth, I feel much of the structures we live under, are fairly corrupt and broken. But also, that the solutions aren't very clear cut.
For instance, if you said to me that should we adopt the two changes you are promoting, we could repeat the economic prosperity of the decades following the Great Depression, I would look at the state of affairs then, compared to now, and view such an assertion with a degree of scepticism.
I sell wholesale to retail and some contractors. We were +4% yoy to end of May, as of now -15% yoy. The handbrake came on hard. Sales this month are 40% down on last year August. We work on a 6 month lead time for stock, the squeeze is on ! There goes the tax take.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.