Tax Cuts, Daylight Savings: October For Retailers

Press Release
8 October 2008

Tax Cuts & Daylight Savings: What Will October Bring For Retailers?

Retail data for September 2008 shows New Zealanders spent in excess of $3.36 billion through the Paymark network for the month.

Paymark processed transactions (which accounts for 75 percent of all electronic payments) were up 6.2 percent in the last 28 days of September compared with the same week days in 2007, a slight increase on August figures. Despite the increase, statistics show the winter has been a tough one for retailers.

Spending growth in September was strongest amongst food retailers, while total spending (by value and number of transactions) was lower than the same month last year for appliance and clothing stores and accommodation providers.

The Government tax cuts came into effect on 1 October; however the first few days of data (up to Sunday 5 October) don't show any major spikes in spending just yet.

Simon Tong, Paymark CEO, says; "We will be watching the figures closely this month to see what impact, if any, the tax cuts and extended daylight savings hours have."

Independent Economist Anthony Byett says; "Early October data show the tax cuts did not produce a bonanza for retailers over the first weekend after the change to the tax scales. There appears to have been some anticipatory spending ahead of higher pay packets, helped along by the September monetary easing, but spending growth in the first weekend remains well below that enjoyed by retailers last year."

Regions experiencing the fastest annual growth for the month were South Canterbury, Gisborne and Taranaki/Taupo. The slowest were Otago, Hawke's Bay and the Bay of Plenty.

Nearly 90% of Kiwis have a debit card, which puts us ahead of any other country in the world in terms of EFTPOS use.

ENDS

September 2008 Paymark transactions / $m / / %pa / / Sept quarter
Auckland/Northland / 1,316.0 / / 5.3% / / 4.8%
Waikato / 236.7 / / 9.2% / / 9.8%
Bay of Plenty / 210.0 / / 4.8% / / 6.1%
Gisborne / 28.5 / / 11.7% / / 10.5%
Taranaki & Taupo / 80.8 / / 11.5% / / 12.8%
Hawkes Bay / 93.0 / / 4.7% / / 6.6%
Wanganui / 39.9 / / 7.0% / / 7.9%
Palmerston North / 106.9 / / 6.0% / / 6.5%
Wairarapa / 30.0 / / 6.4% / / 7.3%
Wellington / 350.6 / / 5.8% / / 5.9%
Nelson / 63.1 / / 5.3% / / 5.6%
Marlborough / 38.8 / / 7.3% / / 8.5%
West Coast / 24.9 / / 9.0% / / 12.1%
Canterbury / 393.5 / / 7.1% / / 7.5%
South Canterbury / 55.9 / / 16.4% / / 15.1%
Otago / 172.8 / / 4.7% / / 6.7%
Southland / 76.5 / / 9.6% / / 10.6%

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