Retail sales rose a greater than expected 1.5% in November but once sales in vehicle related industries are stripped out, core retail sales fell 0.2% which was well below economists' expectations and signals a cautious attitude to discretionary spending among consumers.
Statistics New Zealand said the value of seasonally adjusted total retail sales rose 1.5%, or by NZ$82 million, in November. This follows a 2.4%, or NZ$133 million, drop in October when Goods and Services Tax (GST) was increased to 15% from 12.5%.
Sales of motor vehicles and parts jumped 11.8%, or by NZ$69 million, in November and fuel retailing sales rose 3.6%, or by NZ$20 million.
In contrast, core retail sales - which exclude the motor vehicle-related industries - slipped 0.2%, or by NZ$7 million. Economists had expected overall November retail sales to rise by 1.1% to 1.2% and core sales to rise 0.5%.
"Nine of the 13 core industries recorded increases in November 2010, however, these increases were offset by a decrease in supermarket and grocery stores sales," said Louise Holmes-Oliver, Statistics New Zealand's business statistics manager.
Supermarket and grocery stores sales fell 2.8%, or by NZ$40 million. All other food and drink related industries also recorded decreases in November.
Confirmation of soft November core retail sales follows Statistics New Zealand saying earlier this month that the total value of electronic card transactions fell a seasonally adjusted 1.2% in December from November.
ASB economist Christina Leung said the 0.2% drop in core retail sales suggested households remained cautious in regards to discretionary spending. She said the continued increase in petrol prices was likely to be adding to this caution.
"Beyond the volatility surrounding the pre-GST spend-up, the underlying trend in retail spending remains subdued," Leung said.
"This adds to the recent softness in activity data, and with inflation pressures contained for now there is little urgency for the Reserve Bank to resume the reduction of monetary policy stimulus. We expect the Reserve Bank will leave the Official Cash Rate (OCR) on hold until the September meeting, and retain the same cautious tone in its January OCR Review statement next Thursday," Leung added.
Meanwhile, Holmes-Oliver said the sales trend for total retail has been rising since February 2009 but has flattened over the past year.
"The sales trend for core retail has risen since February 2010 but has flattened in recent months. In actual terms, total retail sales rose 2.5% (NZ$136 million) in November 2010 compared with November 2009," said Holmes-Oliver. "Core retail sales rose 0.6% (NZ$28 million) over the same period."
Retail sales
Select chart tabs
(Updates add detail of December electronic card transactions, chart, economists' core sales expectation, comments from Christina Leung].
15 Comments
Gareth
I just talked to a growers rep. The organic fruit is going to be worth less than the non organic. The apple market is weak due to large crops in the North hemisphere. Sounds like prices are going to be under pressure for a couple of years. He said a couple of exporters have gone under leaving growers out of pocket. The squash processors or at least the bigger ones and some large growers appear to be under bank management. He said the costs have just got too high for high cost cropping in NZ. He thinks this winter is going to be very tough for many and a lot of trees will be pulled out. The mainstream media will get it in about 3 months time. The big banks are struggling to keep financing unprofitable businesses and many will be sold up soon. The grape industry is in turmoil and huge areas will be cut out.
Hi Andrew J. I got some feedback on these points from someone I know who is well placed in the apple industry.
What I was told is that the biggest problem for apple growers and packers right now is the high exchange rate and that the northern hemisphere crop is actually short this year. There is apparently good demand in Asia. But braeburn apples, which are apparently not suitable for Asia, are struggling with Europe due to exchange rates.
Apparently there has been quite a bit of media coverage of braeburn and jazz growers finding the going tough with talk of pulling out these varieties. Have to admit I haven't seen it though...
Edenz Ltd, a coolstore and packhouse opreator and Hawkes Bay orchard leaser was placed in receivership by the BNZ last September. And Mr Apple, which is part of Scales Corporation has been caught up - to some extent - in the demise of South Canterbury Finance and the statutory management of Allan Hubbard. The SCF receiver has an 80% stake in Scales Corp on the block.
Let me know if you hear anything else.
Cheers.
Perhaps the grape/apple growers will be planting ginko next Aj:
http://www.stuff.co.nz/business/farming/4557894/Healthy-outlook-for-gin…
At first , I thought that it was April 1'st , a total wind up ............ But then I remembered the ferret farms , the emus , truffles , mohair goats , llamas .........
........ Fair enough then . Gingko is the next big thing ........ We're all gonna be rich ........ 'cos we can grow them better than anyone else , yeah , even though we've never done this before , we're leading the pack .....
... Yippeeeeeeeeeeee , rich I tell you , NZ is saved ......
Feck ! ......Got a migraine now , where's me bottle of Bob Charles deer velvet tablets , that or the potentiated bee pollen may help me .
"core retail sales fell 0.2% which was well below economists' expectations and signals a cautious attitude to discretionary spending among consumers."
What a load of crap. Someone spends 80 cents less at the supermarket on their $400 weekly shop. Big deal. That is not a cautious attitude to discretionary spending. It is not even one banana less!
Gosh, you really are a jealous little tosser with a chip on his shoulder.
Thanks for paying your tax so my wife and I could get 8% return on our money.
We really appreciated it.
We pay more in tax than you earn so don't worry about that.
I hope you keep your job at KFC Malarkey. I will pee on the toilet floor there next time so that you have something to clean.
Malarkey, you really are a jealous dickhead.
The only government number I have is an IRD number and I pay more than my fair share of tax.
If you want to keep attacking me each time I post good for you you small minded tosser.
I will not be responding to any more of your stupid attacks on my SCF investment. I have already thanked you for your contribution to the return of MY funds.
Remember how you crowed about piling in to SCF only once the GG was confirmed, even though you'd spent the previous month or so howling in outrage about the evil that was SCF?
And remember how you chortled smugly because you were going to be paid-out by taxpayers because you'd piled in to SCF once the GG was confirmed?
Everyone knew SCF was not good for the money, that SCF was about to go down the gurgler, and that the only way anyone was going to get their "investment" back was if the government donated tax dollars to the cause.
So you "invested" in SCF to get 8% interest on top even though you knew all these things, because you wanted to bludge a taxpayer handout.
That makes you worse than most welfare bludgers.
We Are Stuffed = Bludging Welfare Bene.
get a life Malarkey
There is an article in stuff.co about you today:
"Accusations that New Zealand is one of the worst performers in the developed world when it comes to the income gap between rich and poor have been validated by a Sunday Star-Times survey.
Conducted by Horizon Research, it shows the burgeoning gap between the haves and have-nots is frothing over into resentment, anger and disillusionment.
Those who are struggling are slamming the government for giving tax breaks to the rich, and for the perceived "propping up" of failed finance companies"
You need to get over it Marlarkey. I can't help it if you are too poor to take advantage of good investment opportunities. You also need to distinguish between a good investment and welfare.
I am 46 and retired. I do not bludge. I live off my investments accumulated from tax paid income I have saved over my working life. If that makes you jealous, tough. I really couldn't give a toss about you.
Get over it and lose the resentment anger and disillusionment.
Have a nice day:)
"I will not be responding to any more of your stupid attacks on my SCF investment. I have already thanked you for your contribution to the return of MY funds."
Your funds?
You mean the 8% you bludged from taxpayers?
Bludgerrrrrrrrrr.
You scabbed a taxpayer handout and then skited about it.
Hey bene, how many special needs grants for new tyres have you applied for recently?
LOL!
You are a parasite with a sense of entitlement sucking cash from the hardworking taxpayer.
In other words, a bludger.
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.