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December Retail Sales Continue

From the Foundation for Research, Science and Technology
Retail Trade Survey: December 1999 quarter

December Retail Sales Continue

Growth Retail sales continue to grow in December 1999, according to the latest figures from Statistics New Zealand. A steady result for the December month has contributed to a quarterly increase of 1.3 per cent.

Despite the steady pattern of growth there are a number of conflicting factors affecting retailing, making the emerging picture difficult to interpret. High levels of consumer confidence; increasing full and part-time employment; and recent strong residential building activity are positive influences on the level of retail spending. In contrast, higher interest rates and anecdotal evidence of price pressures are also emerging, with higher import volumes indicating competitiveness in supply.

Eleven of the 15 storetypes contributed to this quarter's growth with much of the growth concentrated in the December month. With seasonal variations, such as traditional Christmas spending removed, sales for food retailing were 2.9 per cent above November 1999. This result reflects, in part, an increase in demand for goods in preparation for Y2K and millennium celebrations. Changes in the liquor laws from 1 December 1999 may have also contributed as supermarkets are able to sell beer. Hardware retailing respondents also reported increased sales of barbeques, gas bottles, candles, batteries and plastic water bottles.

Most of the increase experienced by motor vehicle services this quarter can be attributed to rising petrol prices. The Consumer Price Index shows that prices increased by 6.3 per cent at the pumps.

The trend for building consents issued for new dwellings has been falling for five months, however, the preceding 11 months of growth still appears to be impacting on consumer spending. The trend for clothing and softgoods, including soft furnishings; hardware; furniture and floor-coverings; and appliance retailing have all experienced growth this quarter, as consumers furnish new houses and apartments.

Growth in these storetypes was partially offset by a substantial decline in the accommodation, hotels and liquor storetype this quarter.

Len Cook GOVERNMENT STATISTICIAN

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