Electronic card spending inched up 0.2% during August, breaking a sixth month streak of falling spending.
Spending on cards rose $10 million, or 0.2%, in August on a seasonally-adjusted basis to $6.382 billion, according to Statistics NZ on Thursday.
Although it’s only an increase of 0.2%, it’s higher than electronic spending in July, which was down 0.1%, or $6.3 million, on a seasonally-adjusted basis.
Between the months of February to July, total retail spending figure movements fell in order of 0.8%, 0.7%, 0.4%, 1.1%, 0.6% and 0.1%. August’s spending broke that downward trend with its 0.2% increase in retail spending.
Stats NZ said core retail spending – which doesn’t include fuel and vehicles – rose 0.4%, or $25 million, in August.
During the month of August, cardholders made a total of 164 million transactions across all industries, averaging $55 per transaction, resulting in electronic card expenditure of $9 billion.
August’s card expenditure is up around $200 million from July where cardholders made 161 million transactions and the total amount spent using electronic cards was $8.8 billion.
This is up slightly from June, when cardholders made a total of 157 million transactions across all industries, averaging $55 per transaction, resulting in electronic card expenditure of $8.5 billion.
Stats NZ said seasonally-adjusted specific movements by retail spending category in August 2024 included:
- durables, up 0.5% or $7.2 million
- apparel, up 2.1% or $6.6 million
- fuel, up 0.1% or $0.3 million
- consumables, down $0.1 million
- hospitality, down 0.2% or $2.3 million
- motor vehicles (excluding fuel), down 1.5% or $2.9 million
During August, the non-retail sector (excluding services), was down by 0.4%, or $8.4 million, compared to July 2024.
The non-retail sector includes medical and health care, travel and tour arrangements, postal and courier services, and other non-retail industries.
Services spending, which Stats NZ says covers repair and maintenance, personal care, funeral services, and other personal services rose by just 0.2% or $700,000 in August compared to July.
In July, non-retail sector spending jumped 2.1% or $47 million compared to June 2024 while service sector spending rose 0.7% or $57 million compared to the June period as well.
'New Zealand households yet to throw their wallets open'
Westpac NZ Senior Economist Satish Ranchhod says the rise in electronic card spending would be welcome news for retailers but described August’s increase in spending as “fairly modest” particularly with the Government’s tax cuts being rolled out from the 31st July.
“August’s spending figures were weaker than we had anticipated. We expected that tax cuts would support a larger rise in spending. However, New Zealand households are yet to throw their wallets open,” he says.
“We expect that spending will pick up over the coming year as financial pressures ease and the full impact of stimulus measures ripple through the economy. However, that rise looks like it may be gradual, at least over the remainder of this year.”
Retail NZ Chief Executive Carolyn Young says despite the month-on-month rise in August, electronic card transactions were down 4.6% compared to August 2023, and the number of transactions year-on-year slipped 1%.
"We do traditionally see an uplift in retail sales in August and this combined with the adjusted tax breaks would account for the positive result. As always, the devil is in the detail, while we are happy to see a small uplift in August compared to July, it is still worrying that year on year there is a sizeable decrease. We are certainly hoping that cuts in interest rates and a lift in consumer confidence will result in a turnaround before Christmas," says Young.
ASB Senior Economist Kim Mundy and Economist Yen Nguyen say August’s card spending suggests household demand remains subdued.
“There’s been a noticeable shift in household expenditures recently. Consumers are allocating more funds towards essentials like groceries and household goods – around 41% of total card spending compared to about 36% pre-covid – while cutting back on other categories. Following the challenges posed by rising living costs and uncertainties during the covid-19 pandemic, Kiwis may now be adopting a more savings focused approach than before,” they say.
“We expect the retail sector to remain weak for the remainder of 2024. Although there are a few emerging tailwinds, plenty of headwinds remain.”
Stats NZ also released its August Selected Prices Indexes (SPI) on Thursday, finding food prices had increased by 0.4% in the 12 months to August 2024.
The SPI – which covers about 45% of items included in the Consumers Price Index measure of inflation – found higher prices for groceries, ready-to-eat food and restaurant meals were behind the annual increase.
6 Comments
The headline says 'rebounds'.
I thought my definition of the word must be wrong. So I looked it up.
1. bounce back through the air after hitting something hard.
"his shot hammered into the post and rebounded across the goal"
2. recover in value, amount, or strength after a decrease or decline.
"the Share Index rebounded to show a twenty-point gain"
Nope. Still means the same thing. ;-)
So people are spending 0.2% more at the supermarket. Yay! It is still absolutely dire out there for most independent SME retailers.
Any lift in spending over summer/festive period will be short lived I would imagine and next winter will be longer and colder than this. Time to buy some cheap Ugg boots.
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