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A pause before another rush

The first seven days of December were busy for most merchants, as to be expected this time of year, but the annual growth rate was low. Spending amongst non-fuel merchants through Paymark last week, at $1,199 million, was 10% above the January-October weekly average but only 1.2% above spending during the first seven days of 2017.

Annual growth was highest last week in Palmerston North (7.5%) and Southland (6.4%), low in Auckland/Northland (0.1%) and negative in Wairarapa (-1.0%).

Spending growth for the country over the weekend (8-9th) remained low, with non-fuel spending on Saturday only 2.0% above the same Saturday last year and Sunday also up a modest 2.6%.

There is the possibility that annual growth will remain weak this month but more likely there are two factors shifting the spending pattern this year.

First, we have the impact of Black Friday sales that appear to have brought spending forward. Typically, spending builds through the last two weeks of November and the first week of December, then ramps up rapidly in the last couple of weeks ahead of Christmas Day. This year the three weeks were again busy but spending in the week of Black Friday was slightly above that of last week. For the non-food and non-hospitality merchants within the core retail sector, national spending was 3% or $10 million higher three weeks ago.

Second, in previous years when Christmas Day has fallen on a Tuesday, spending in the last seven days has been higher than usual.

The net effect appears to be spending both stretched earlier and later this year. Looking ahead that makes for a busy time before Christmas Day.

In the week ahead, we are likely to increase our buying at department stores, recreational goods shops, electrical shops and clothing stores by 10-25%, only to step up even further in the last few days before Christmas.

By the last seven days before Christmas, these stores are expected to be experiencing business that varies between 80% to 180% higher that during an average week from the first ten months of the year. And then there is the food. Spending at food and liquor merchants will rise to 60-70% above average in the last seven days before Christmas.

PAYMARK All Cards Data (1-7th December 2018 versus 1-7th December 2017)
transactions $millions
Annual % change
Auckland/Northland $491.7 0.1%
Waikato $81.8 0.3%
BOP $77.0 0.2%
Gisborne $9.2 5.5%
Taranaki $22.2 3.0%
Hawke's Bay $34.1 2.1%
Wanganui $11.3 4.8%
Palmerston North $41.6 7.5%
Wairarapa $10.3 -1.0%
Wellington $117.7 2.7%
Nelson $22.4 1.1%
Marlborough $14.8 4.5%
West Coast $7.3 0.5%
Canterbury $131.0 1.8%
South Canterbury $17.4 1.2%
Otago $67.9 3.2%
Southland $28.3 6.4%
New Zealand $1,199.1 1.2%
* Underlying spending excludes large clients moving to or from Paymark within recent years

Figure 1: Paymark All Cards transaction data (1-7th December 2018 versus 1-7th December 2017)

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