By Paul McBeth
New Zealand retail spending grew at its fastest quarterly pace since December 2006 as the inflow of tourists for the Rugby World Cup bolstered consumer demand. The kiwi dollar gained on the report.
The total volume of spending grew 2.2 percent to $16.97 billion in the three months ended Sept. 30, according to Statistics New Zealand, beating the 0.7 percent forecast in a Reuters survey of economists. Stripping out motor vehicle related spending, the core figure climbed 2.4 percent.
The value of retail spending, which accounts for both sales volume growth and price hikes, climbed 2.1 percent in the quarter to $17.32 billion, and was up 2.7 percent when excluding auto-related spending.
“The increase in sales volumes coincided with the arrival of 80,000 overseas visitors here for the Rugby World Cup,” industry and labour statistics manager Louise Holmes-Oliver said in a statement.
That world cup injection is the first time the event has shown up in spending figures, with electronic card spending muted in September, stoking fears the tournament might not have been the windfall everyone expected. Since then, spending on credit and debit cards in October showed some gains, and helped quell those earlier concerns.
The New Zealand dollar climbed to 79.22 US cents after the figures were released, from 78.87 cents immediately before.
Of the 15 industries surveyed, 13 reported increased sales volumes in the quarter, led by supermarket and grocery stores up 3.8 percent to $4.31 billion, followed by accommodation up 6.5 percent to $656 million. Spending on liquor grew 3.5 percent to $329 million, while food and beverage services gained 1.7 percent to $1.69 billion.
Statistics NZ said the value of accommodation was the biggest since the series began in 1995, with many respondents putting it down to the influx of visitors from the Rugby World Cup.
The volume of spending on furniture, floor coverings, houseware and textiles shrank 6 percent to $404 million in quarter, while department store sales fell 0.1 percent to $928 million.
The quarterly volume of spending on fuel rose a seasonally adjusted 1.2 percent to $1.58 billion, while the value shrank 3 percent to $1.8 billion in the period, the first decline since September last year.
The actual volume of spending rose 3.9 percent to $16.47 billion compared to September 2010, while the actual value of sales rose 6.3 percent to $16.85 billion from the same quarter a year earlier.
The gain in retail spending was across the board on a regional level, with sales up 3.6 percent in the South Island and 2.2 percent in the North Island.
Today’s release comes after the ANZ Roy Morgan consumer confidence survey showed households are losing their optimism from earlier this year, heralding more bad news for retailers who have been struggling to deal tepid demand.
Since the global downturn three years ago, local households have preferred to use record low interest rates to repay debt rather than ramp up new spending, acting as a drag on New Zealand’s economic recovery.
Actual retail stocks grew 5.5 percent to $6.21 billion at the end of the September quarter compared to the same period a year ago, led by a 22 percent lift in non-store and commission-based retailing to $104 million and a 19 percent increase in fuel stocks to $95 million.
Supermarket and grocery stocks rose 10 percent to $654 million at the end of the period, and liquor stocks rose 17 percent to $166 million.
(BusinessDesk)
ASB economist Christina Leung issued the following statement on the implications of this data.
The effects of the Rugby World Cup are clearly evident in the Q3 retail sales result. Spending on accommodation, food and clothing increased as rugby supporters geared up for the knock-out stages of the World Cup.
Nonetheless, there are signs that beyond the boost from the World Cup an underlying recovery in household demand continued into the second half of 2011.
Given the retail sector was one of the sectors which bore the brunt of the recession, today’s result is encouraging.
We expect that as consumer confidence continues to improve this will flow through to a continued recovery in retail spending over the coming year.
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18 Comments
Yeah – we need more like that stuff - to revitalise the economy.
http://www.youtube.com/watch?v=2MUBrClhgks
By the way the cop is on $ 6.- p/h - the glazier on $ 8.50.- - but that was a long time ago.
That is interesting, I have spent several hours this morning with a retailer from Auckland Central City, and things are very quiet.
He has already sold his house and moved in above the shop to save on costs. His lease runs out soon and he douts he will renew, it certainly won't be a long term one if he does.
Quite a mainstream sort of business David, although I don't have is permission to disclose any further. Any tomatoes are bad for you anyway, nightshade family you see. Grains are a no no as well, but for other reasons. There are worse things than meat that is for sure.
Perhaps liquor, but would you want to have to keep a baseball bat under the counter all the time?
So the one off rugby cup effect......looks at some other numbers,
"The volume of spending on furniture, floor coverings, houseware and textiles shrank 6 percent to $404 million in quarter, while department store sales fell 0.1 percent to $928 million."
This sector shrank 6%....in a quarter.....24% per annum?
Department stores....dunno about other ppl but when I wander into farmers there seem to be perm sales.....30 to 50%....if they still shrank yet sold more plus rugby spending.....that cant be good either.
I'd like to see these numbers "corrected" by taking the rugby spending out......I dont think its very rosy once that is done.
regards
I think you are right - in actual fact this data is not positive at all - when you really try hard enough to make up some negative rubbish.
Probably the much better than expected figures are due to shop assistants giving away free bjs and people being held at gunpoint in shops until they purchased something.
JP Morgan Chase, one of the country's biggest lending institutions, predicts that the economic forecast in the United States might not be as dire as it seems. The firm, one of the nation's largest lenders, recently unveiled a report on consumer spending. The report says that, despite the housing crisis, increasing prices and high unemployment, United States businesses should have a plan ready for an increase in consumer spending. The report also indicates that business can drive the trend. New JPMorgan report predicts consumer spending will rise. The report encourages American firms to share their wealth in the form of incremental dividend payouts and higher stock values in order to increase consumer wealth and, subsequently, consumer spending.
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