NZ retail spending on credit, debit cards rises 0.4 percent in July, core retailing weak

Aug. 9 (BusinessDesk) - New Zealand retail spending on credit, debit and charge cards rose in July, though the gain was almost entirely driven by spending on fuel, while core retailing dropped for the first time in four months.

Total retail billings rose 0.4 percent, seasonally adjusted, in July, while growth in spending for June was revised down to 1 percent from 1.1 percent, according to Statistics New Zealand. Excluding fuel, core retail transactions fell 0.7 percent, mainly reflecting weaker apparel sales.

July data may not be enough in itself to signal a softening of retail activity, since it follows three strong months and individual components such as clothing can shift around on temporary factors like unexpectedly warm weather in winter.

The data accounts for about 65 percent of New Zealand retail sales and is the main indicator of monthly consumer spending since the retail sales series was moved to a quarterly basis. Figures for the June quarter are due for release on Aug. 14 and are forecast to show a quarterly gain of 1.25 percent, according to a Reuters survey, up from 0.5 percent in the first quarter.

“It might be hinting that things are softening but with the monthly data you’d want to see a few more months to be sure,” said Robin Clements, economist at UBS New Zealand. Apparel tends to be particularly volatile because of variables like shifting weather patterns.

Apparel sales dropped 3.3 percent in July, following a 2.2 percent gain in June and a 0.6 percent decline in May. Consumables such as food and liquor rose 0.1 percent while durables, which include hardware, furniture and appliances, fell 1.4 percent.

Hospitality edged up 0.1 percent, after four months of growth of more than 1 percent.

Fuel sales rose 5.3 percent in July, following gains of 4.3 percent and 4.4 percent respectively in June and May, reflecting rising prices. Vehicle related spending excluding fuel fell 0.3 percent in July after three months of above 1 percent growth.

Total card spending rose 0.2 percent in the month and was up 8 percent from the same month last year. Core retailing rose 4.5 percent from a year ago and total retail rose 7.7 percent, driven by a 24 percent surge in fuel and a 13 percent gain for vehicles.

In unadjusted terms, there were 111 million transactions across all industry types in July with an average value of $52 and a total spend of $5.8 billion.

(BusinessDesk)

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