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Town & Country Report - Farmer Retail Spending

12 December 2004

Town & Country Report

Farmer Retail Spending Recovers •

In November city dweller spending was 0.6% weaker than normal while farmer spending was 0.2% above normal, and over the year to November farmer spending growth of 6.9% easily outpaced city-based consumer spending growth of 5.1%. • Over the past year farmers have shown particularly strong spending growth relative to townies in the areas of department stores, furniture, hardware, liquor, and recreation goods.

In November consumers living in cities increased their spending by 2.2% from October levels while farmers boosted their spending 3.1%. On average since 2001 in November city-dwellers have increased their spending 2.8% from October while farmers have boosted theirs 2.9%. This means that in November city spending was weaker than usual while farmer spending showed a recovery. This reverses the situation in October when our seasonally adjusted city spending measure was up 0.2% following a firm 0.8% rise in September while farmer spending was down 0.9% after a strong 2.4% gain in September

Over the past three months average monthly city spending growth has been around 0.1% while farmer spending has grown more than twice this near 0.3%. This suggests that whereas we were seeing a pattern of farmer spending growth slowing toward city rates this trend is now reverting to the earlier pattern where farmer retail spending has been much stronger than in the cities.

This strong performance may reflect continued rises in commodity prices. Over the entire year to November rural spending increased 6.9% from the year to November 2003 while urban spending rose 5.1%.


Storetype Breakdown

The debit and credit card spending data can be broken down on a storetype basis. The level of volatility in monthly and especially storetype data means one should focus on three month smoothed changes at best rather than monthly variations. Looking just at storetype spending changes in the year to November 2004 versus the year to November 2003 we find the following significant variations.

Urban consumers have shown greater growth in spending in fresh meat, fruit & vegetables up 7.0% versus 1.6% for farmers, takeaway food at 17.0% versus 15.5%, appliances at 10.6% versus 6.7%, chemists at 6.3% versus 3.8%, and automotive fuel at 12.3% versus 9.7%. Farmer spending growth has outpaced urban spending growth in almost all other categories over the year including department stores at 7.8% versus 4.6%, hardware at 10.7% versus 5.6%, recreational goods at 3.8% versus 1.1%, and furniture & floor coverings at 9.6% versus 5.2%.

ENDS

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