RWC spending set to improve recent months’ soft trading
RWC spending set to improve recent months’ soft trading conditions
The latest figures from Paymark suggest that the spending boost expected to accompany the RWC will come as a welcome relief to retailers, with soft trading conditions across most sectors defining the last couple of months.
The value of transactions through the Paymark network increased 3.2 per cent (year-on-year) in July and 4.1 per cent in August. Both of these rates, as well as the average of 3.7 per cent for the two months, are below the 4.4 per cent growth rate averaged in the first half of the year.
The spending slowdown across the last two months appears to be have occurred across many industries and regions and Paymark Head of Sales and Marketing, Paul Whiston, says that the figures are typical of a mixed trend that has been noticeable over the past 12 months.
“It’s been fairly flat out there with sectors experiencing highs and lows at different points throughout recent months. This pattern has come through consistently over the past year and I think it would be fair to say that few businesses have escaped the mixed spending patterns, ” he says.
Of particular interest during the last month were department stores (-3.6 per cent year-on-year) and furniture stores (-5.5 per cent year-on-year) where spending remains below year ago levels. In addition to this, food/liquor stores (+7.8 per cent year-on-year) and hospitality outlets (+6.6 per cent year-on-year) show higher spending than the previous year, but the annual growth rate has declined from the higher levels of previous months.
Paul Whiston adds that the last two months’ trading will provide a reference point for comparisons during the RWC, and advises that the Paymark network is ready to process a huge increase in the volume of payments.
“New Zealand retailers are ready for this. Our network is ready to handle the increased volume of transactions and with the national upgrade of terminals that was completed in June we are all set to make the most of this exciting opportunity,” adds Paul Whiston.
Noticeably, annual spending growth was above the year-to-date average in Auckland/Northland (+7.0 per cent) during August – second only to Bay Of Plenty (+7.3 per cent) – so the extra RWC boost will make for generally strong trading conditions for many Auckland outlets.
Conversely, merchants in other regions including those experiencing slow-to-negative annual growth between August 2010 and August 2011 such as Wairarapa (+0.3 per cent), Canterbury (-3.5 per cent) and Marlborough (-2.4 per cent) will be looking for a kick-start from the RWC.
The number of card transactions for August was 2.6 per cent higher than a year ago with debit card use growing 3.2 per cent and credit cards experiencing low growth of 0.7 per cent.