Cautious Outlook and Wet Weather Curb Spending

Cautious Outlook and Wet Weather Prompt Spending To Slip

Date:   Tuesday, 15 June

The latest figures from Paymark, which processes more than three quarters of all electronic transactions in New Zealand, indicate that growth in spending remained relatively flat in May at 1.3 per cent when compared to the same period last year.

Figures show that spending decelerated mid-May and slowed down further towards the end of the month.  This could have been due to a number of factors such as the bad weather, some nervousness ahead of the 20th May budget and an increased anxiety about the global financial markets.

“Rain was just one part of the puzzle for retailers last month. For most people, money is still tight and there may have been some restraint in advance of the Budget,” says Simon Tong, CEO of Paymark.

“Whatever the reasons, similar to the pattern of recent months our network is seeing subdued spending, a trend which suggests continued cautious sales forecasting for retailers,” he adds.

Spending growth in sectors such as liquor outlets and recreational goods retailers, for example, were down on the same month last year (- 8 per cent and – 5 per cent respectively).   However sectors that showed good growth were footwear (+21 per cent), takeaway food (+7 per cent), cafes / restaurants (+6 per cent) and furniture (+6 per cent).

The fastest growth rates were around the Waikato (+3.0 per cent), Bay of Plenty (+2.9 per cent), and Gisborne areas (+5.4 per cent). The parts of the country to experience significant declines were Nelson (-1.9 per cent), Marlborough (-5.9 per cent) and Canterbury (- 0.2 per cent).

The volume of transactions processed through the Paymark network for May was 3.0 per cent higher than a year ago; an annual growth rate lower than any achieved amid the recession of 2008.

Credit card transactions also dropped (-0.4 per cent), whilst debit card transactions were up 4.1 per cent.

    ENDS

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