NZ retail card spending flat in June as cheap petrol offsets Lion tour boost
By Rebecca Howard
July 11 (BusinessDesk) - New Zealand retail spending on electronic cards was unchanged in June as hospitality - largely linked to the British and Irish Lions rugby tour - offset lower fuel prices.
Retail spending on credit and debit cards was unchanged in seasonally adjusted terms from May, following a 0.4 percent fall in May, Statistics New Zealand said.
"Retail spending in the June month was flat because the high hospitality spending was offset by the low fuel prices," business indicators manager Sue Chapman said. "The increased spending on hospitality could be largely a result of the influx of British and Irish Lions fans." The Lions tour kicked off on 3 June and ended on 8 July.
Four of the six retail industries rose in May, with hospitality up 2.4 percent and the consumables industry - which includes grocery and liquor retailing - increasing 0.8 percent in the month, while the durables industry inched up 0.1 percent. Fuel retailing dropped 3.2 percent and apparel fell 0.9 percent. Vehicle spending – excluding fuel – rose 0.3 percent.
ASB Bank economist Nathan Penny said spending was softer than expected, in particular in areas like apparel and consumables. "We had expected a more buoyant result. It's a little weaker than anticipated."
The Reserve Bank is keeping a close watch on consumer spending for any signs of inflationary pressures but "there is no smoking gun here," said Penny. The central bank has indicated it will keep rates on hold until at least September 2019, given the lack of domestic inflation.
Core retail spending, which excludes vehicle-related industries, rose 0.8 percent on month in June after falling 0.3 percent in May.
Of the non-retail industries, spending on non-retail excluding services was unchanged from May while spending in the services industry rose 1 percent.
Actual retail spending climbed 4.5 percent to $4.9 billion in June from the same month a year ago.
Card-holders across all industries made 135 million transactions in June versus 139 million in May and 134 million in April. The average value in June was $49.
On a quarterly basis Stats NZ said spending in the retail industries rose 0.7 percent in the June 2017 quarter, after a 1.5 percent rise in the March 2017 quarter.
"The rise in retail card spending in the June quarter was driven by an increase in consumables and hospitality spending," Stats NZ's Chapman said. "However, this increase in retail spending was moderated by a strong decrease in fuel spending."