Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Is this the calm before a storm of credit card thrashing?

By Jenny Ruth

Dec. 10 (BusinessDesk) - Retail spending using electronic cards was only 1.2 percent higher nationwide in the first seven days of December than in the same week last year, according to Paymark, which processes more than 75 percent of New Zealand card transactions.

However, it suggests this is “a pause before another rush” and that the Black Friday sale in November may have bought spending forward.

Meanwhile, Westpac’s economists are suggesting the recent fall in petrol prices “should mean a little more left in consumers’ wallets for other spending.”

Paymark says the $1.2 billion in spending in the first seven days of December was 10 percent higher than the average weekly spending between January and October this year.

But compared with spending in the same week last year, spending was highest last week in Palmerston North, up 7.5 percent, and Southland, up 6.4 percent, but low in Auckland and Northland, up just 0.1 percent, and negative 1 percent in the Wairarapa.

“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,” Paymark said.

“This year, the three weeks were again busy but spending in the week of Black Friday was slightly above that of last week,” it said.

But it is predicting a surge is still to come. “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 percent, only to step up even further in the last few days before Christmas.”

Paymark said in the last seven days before Christmas, it expects an 80-180 percent lift compared with the average week between January and October.

It expects spending at food and liquor merchants will rise 60-70 percent above average in the last seven days before Christmas.

Westpac said it is expecting a temporary improvement in the housing market due to recent falls in mortgage rates and the loosening of the Reserve Bank’s loan-to-valuation restrictions from Jan. 1.

Westpac cut its two-year fixed mortgage rate from 5.5 percent to 4.79 percent in September and it also has a 'special' offer at 4.29 percent.

“The improvement in the housing market is likely to be felt particularly acutely in Auckland,” the bank said.

“The Auckland housing market has been treading water since mid-2016, so even a modest lift in prices could generate a bit of momentum in consumer spending in the region.”

Westpac notes that oil prices peaked in early October with Brent crude rising above US$86 a barrel but that has since receded to about US$60.

The New Zealand dollar has also risen over that period, helping to make petrol prices cheaper.

“For New Zealand consumers that means they’ve seen a noticeable drop in prices at the pump from a peak of around $2.48 per litre in early October to around $2.08 per litre currently,” the bank said.

“With petrol costs gobbling up a smaller share of household budgets, there should be a little extra left to spend in other areas.”



© Scoop Media

Business Headlines | Sci-Tech Headlines


Frog Recruitment: Kiwi Workers Reluctant To Make Business Trips Across The Ditch Despite Trans-Tasman Bubble Opening

When the trans-Tasman travel bubble opens today, many Kiwi companies won't be rushing to buy an air ticket, reluctant to cross the ditch to do business. The latest survey conducted by leading recruitment agency, Frog Recruitment of nearly 1,000 New Zealand ... More>>

Tourism: Employers Welcome Back Working Holidaymakers

Tourism businesses gearing up for the return of Australian visitors from next week will be relieved to learn that they will also have access to an offshore pool of much-needed job candidates, Tourism Industry Aotearoa says. Tourism employers around ... More>>

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Stats NZ: Prices For Transport And Housing Rise In March 2021 Quarter

Higher prices for transport and housing led to a 0.8 percent lift in the consumers price index in the March 2021 quarter, Stats NZ said today. Prices for getting around rose in the March quarter. Transport prices rose 3.9 percent, the biggest quarterly ... More>>

Stats NZ: New Report Shows Impact Of Demands On Land In New Zealand

A new environmental report released today by the Ministry for the Environment and Stats NZ, presents new data on New Zealand’s land cover, soil quality, and land fragmentation. The land cover data in the report, Our land 2021 , provides the most ... More>>


Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>