NZ retail sales growth stalls in June as prices play catch up
By Rebecca Howard
Aug. 23 (BusinessDesk) - Retail sales growth stalled in the June quarter, although rising prices helped the value of sales catch up from a lull earlier in the year.
Retail sales volumes rose a seasonally adjusted 0.2 percent in the June quarter from 0.7 percent in the March quarter, Stats NZ said. Economists polled by Bloomberg had predicted the 0.2 percent lift.
“We’ve seen relatively small changes in most of our retail industries this quarter,” retail statistics manager Sue Chapman said.
The data echoes recent company reports from retailers who have signalled a slowdown in same-store sales growth in New Zealand.
Industry group Retail NZ's June-quarter survey, published at the start of the month, showed that 58 percent of respondents didn't meet their sales targets for the period – the most since the survey began mid-2015.
That experience isn't universal. Discount retailer Warehouse Group upgraded its earnings guidance in part on a better trading performance, but also due to its cost-cutting initiatives. And today, Warehouse raised its full-year operating profit guidance to a range of $73-75 million from the upgraded $67-70 million forecast because incentive payments “have not been fully triggered.”
The Stats NZ figures show electrical and electronic goods retailing had the largest rise, up 5 percent in the quarter after increasing 0.3 percent in March. Warehouse owns the Noel Leeming electronics and appliance chain.
Supermarket and grocery retail sales reported the largest fall in the June quarter, down 0.9 percent following a 0.4 percent rise in March.
However, when the effects of price changes are included, the seasonally adjusted value of total retail sales rose 0.7 percent, or $170 million in the June quarter, following a 0.1 percent increase, or $17 million in the March quarter. The consumers price index rose a seasonally adjusted 0.5 percent in the June quarter and was flat in the March period.
Fuel retailing boosted the total value of sales in the latest quarter, up 2.4 percent or $54 million. This follows a 1.9 percent drop in the prior quarter.
“The fuel industry often provides volatile movements which are mainly reflective of the price changes,” Chapman said.
Stripping out the auto trade, core retail sale values were also up 0.7 percent, led by a 6.3 percent increase in recreational goods, or $40 million. Supermarket and grocery store retailing values fell 0.5 percent, or $26 million.
In actual terms, the value of total retail sales was $23.7 billion in the June quarter, up 3.4 percent from a year earlier. The volume of retail sales rose 2.9 percent in the June quarter from a year earlier, although core sales volumes were up 3.6 percent.