NZ retail sales grow faster than expected in second quarter as hospitality reaps record gain
By Paul McBeth
Aug. 14 (BusinessDesk) - New Zealand retail sales grew faster than economists were picking in the second three months of the year, led by record gains in the hospitality sector.
The total volume of retail sales rose 1.7 percent, seasonally adjusted, to $17.94 billion in the three months ended June 30, from a 0.9 percent pace of growth in the first quarter, which was revised up from 0.5 percent, according to Statistics New Zealand.
That beat the 1.25 percent growth expected in a Reuters survey of economists. Actual retail sales volumes rose 4.2 percent in the June quarter from the same period a year earlier, and actual values were up 3.3 percent to $17.55 billion.
Food and beverage services industries, which consist of cafes, restaurants and bars, led gains, reporting an increase of 4.5 percent to $1.8 billion, seasonally adjusted, making it the sector’s biggest quarterly jump since the series began in 1995. The value of spending on hospitality rose a seasonally adjusted 0.9 percent to $18.14 billion.
“A record increase in the food and beverage services industry topped off the widespread rise of consumer spending,” industry and labour statistics manager Blair Cardno said in a statement.
The New Zealand dollar rose to 79.82 US cents from 79.62 cents immediately before the numbers were released.
Electronic cards data, which accounts for about two-thirds of retail sales, had already indicated household spending will likely make a bigger contribution to economic growth in the second quarter, while inflation figures showed retailers trimmed their level of discounting in the quarter, with 14 percent of stock sold at a lower price compared to 16 percent in the March period.
The volume of core retail sales, which strip out vehicle-related spending, rose 2.3 percent to $13.95 billion in the quarter, and the value increased 2 percent to $13.87 billion.
The volume of spending on fuel fell 5 percent to $1.59 billion for a 7.5 percent decline in the value to $1.86 billion, while the volume of purchases of vehicles and parts increased 3 percent to $2.41 billion, for a percent increase in value terms to $2.42 billion.
Spending on hardware, building and garden supplies rose 3.7 percent in volume terms to $1.33 billion and 4 percent in value terms to $1.35 billion, while furniture, floor coverings, houseware and textile spending advanced 5.4 percent in volume terms to $502 million and 3.2 percent to $494 million in value terms.
Bubbling property markets in Auckland and Christchurch, which are suffering from a limited supply of new housing, have been under the microscope as the Reserve Bank monitors the risk of rising household credit spilling over into consumer spending.
Today’s figures show seasonally adjusted retail sales rose above $4,000 per head of population for the first time since September 2007, at $4,016 in the June quarter.
Retail stocks at the end of the quarter rose 0.5 percent to $6.35 billion from a year earlier, led by a 23 percent increase in non-store and commission-based retailing to $113 million, and an 8.5 percent lift in supermarket and grocery store stocks to $648 million.
Auckland was the biggest gainer across the regions with actual sales up 5.8 percent to $6.08 billion in the June quarter from a year earlier, followed by a 5.1 percent lift in Canterbury to $2.4 billion. On a seasonally adjusted basis, Canterbury retail sales rose 0.3 percent and Auckland gained 1.6 percent.