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Spending Remains Modest with 2 Full Shopping Days Left

Spending Remains Modest with 2 Full Shopping Days Left

The first three days of December started off with a countrywide shopping boom, however the following 18 have not been quite as kind to retailers according to figures released today by Paymark, which processes more than 75 per cent of electronic transactions in New Zealand.

During the first 21 days of December (1st – 21st inclusive) Kiwis spent a total of just over $3b at shops around the country – a growth in value of 3.8 per cent when compared to the same time last year. This growth rate is lower than the 4.6 per cent trend across both October and November.

In terms of volume, 57,723,941 transactions were processed through Paymark’s network between the 1st and 21st December – an increase of 3.4 per cent year-on-year.
Wet weather during the last full weekend before the big day (Friday 17th – Sunday 19th) put a damper on the shopping spirit, and spending data over these three days mirrors that, with the value of sales down 0.8 per cent when compared to the same time last year.

Paymark CEO Simon Tong says that the data reinforces the continuing trend of caution amongst shoppers.

“Retailers are still having a tough time of it and while we have seen an increase in sales over the last few months, it’s important to note that the increases have been very mixed across sectors,” he says.

“We have also noticed a pattern when it comes to how people are shopping, Kiwis aren’t reaching for their credit cards as much any more, preferring to use their own money. In the first 21 days of December shopping Eftpos spending is up 5.3 per cent and credit is up a lesser 2.0 per cent,” he adds.

Cautiousness and restraint across the first 21 days has been most evident in Nelson and the West Coast, which have experienced modest growth rates of 2.3 per cent and 0.5 per cent respectively. Wellington remains amongst the slowest regions, with a slow 2.2 per cent growth rate.

More positively, Southland continues to track well, with an annual growth rate of 5.7 per cent and was also one of the regions to record strong sales over the last weekend, with growth of 4.6 per cent (both year-on-year).

When looking at sectors, it’s good news for kids – small toy shop sales are up 12 per cent while sales at the large, general retail stores are up 3.5 per cent so it looks like stockings will be filled.
Kiwis can also expect to see a lot of books and specialty food items under their trees this year, with these sectors experiencing good growth of 5.0 per cent and 18.0 per cent respectively (year–on-year). Also doing well in terms of year-on-year comparisons are general food stores (+ 5.4 per cent), fast food outlets (+ 9.6 per cent) and auto repairs (+ 6.0 per cent).

Sectors on a bit of a ‘go-slow’ include the recently well-performing footwear category (+ 2.9 per cent), furniture stores (+ 3.6 per cent), and jewellery/watch stores (+0.3 per cent).
Sectors not faring as well include music shops (- 20.1 per cent year-on-year), garden centres (- 5.1 per cent year-on-year) and camera/photography shops (- 4.8 per cent year-on-year).

Simon Tong says that there are many reasons for the mixed spending patterns this Christmas.

“This Christmas has been affected by a number of factors; big sales and heavy discounting starting earlier in the year, bad weather on the last shopping weekend prior to Christmas, restraint in spending on luxury and big-ticket items and perhaps a general feeling of keeping things a bit more subdued than in the past,” he concludes.

ENDS

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