Retail spending was flat in November with events such as Black Friday not producing anything more than the expected seasonal upturn in trading patterns.
Total card spending in November was down on the same month a year ago.
The latest figures will likely be a disappointment to retailers after sales had shown their strongest gains in some months in October following the beginning of Reserve Bank Official Cash Rate cuts in August.
Statistics New Zealand says total retail spending was, on a seasonally-adjusted basis, unchanged in November.
Core retail spending, which doesn't include fuel and vehicles, eked out a 0.1% gain compared with October 2024.
And including non-retail transactions, total electronic card spending was actually down 0.1% ($6 million).
After we saw in October 2024 the first year-on-year rise in core retail spending (of 0.5%) since February of this year, November saw the figures back in the minuses, with a 0.9% drop in core retail spending compared with the figures in November 2023.
And total retail spending was down 2.3% compared with November 2023.
Stats NZ said in actual terms, cardholders made 171 million transactions across all industries in November 2024, with an average value of $56 per transaction. The total amount spent using electronic cards was $9.576 billion.
The amount spent was 1.1% lower than the $9.684 billion spent in November 2023.
The 171 million transactions in November 2024 was up 1 million on the same month a year ago, however, the average value per transaction, at $56, was down compared with the $57 per transaction figure a year ago.
Westpac senior economist Satish Ranchhod, while noting that retail spending levels were flat in November, said this did follow gains in recent months that have been maintained.
"It’s also notable that petrol prices were up about 2% over the past month. Higher fuel prices would have constrained spending in other areas. Even so, core spending (which excludes fuel purchases) actually managed to nudge 0.1% higher over the month."
Ranchhod said looking more closely at the make-up of spending, the gains seen in recent months have mainly been due to increases in hospitality spending, which is up 5% since August.
"In contrast, spending in other discretionary areas, like household furnishings and apparel has remained soggy. That’s despite widespread Black Friday sales events. Spending on items like furnishings tends to be more sensitive to households’ cash flows, especially given their higher cost. We expect spending in these categories will start to turn higher next year as increasing numbers of households see their mortgage costs fall."
Over the coming months, increasing numbers of borrowers will roll on to lower mortgage rates, Ranchhod noted.
"Combined with a pick-up in consumer confidence, we expect that will support a gradual recovery in spending. That will be welcome news for retailers and hospitality businesses as we head into the festive season and 2025. However, that recovery is likely to be gradual in the near term, especially as unemployment has picked up."
Stats NZ said the non-retail (excluding services) category decreased by $35 million (1.5%) from October 2024. This category includes medical and other health care, travel and tour arrangement, postal and courier delivery, and other non-retail industries.
The services category was up $2.7 million (0.7%). This category includes repair and maintenance, and personal care, funeral, and other personal services.
The total value of electronic card spending, including the two non-retail categories (services and other non-retail), decreased from October 2024, down $6.0 million (0.1 percent).
Stats NZ said the key seasonally adjusted moves in November 2024 when compared with October 2024 were:
- hospitality, up $17 million (1.4%)
- consumables, up $12 million (0.4%)
- fuel, up $6.2 million (1.3%)
- motor vehicles (excluding fuel), down $0.6 million (0.3%)
- apparel, down $3.2 million (1.0%)
- durables, down $3.8 million (0.2%).
21 Comments
Except it doesn't, since the OCR isn't just a massive lever for deciding how much fun we want to have.
Lowering the OCR has major downsides too, which is why it's unlikely to get as low as some might like to think it will.
Our economic problems run much deeper than that.
This is why the coalition is trying to cut costs, due to the extravagance of Labour spending for poor resuktd.
The increase of wages and hourly rates was always going to kill cafes etc.
Orr and the Banks need to drop rates, as the tax take to provide services from the Government is dropping.
The Lefties and socialists should never get in again.
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