It’s an information-saturated world out there, so it’s hard to find the time to sit and take in all of the economic reports. We’ve broken down the five latest bits of economic data in New Zealand retail that you should be aware of.rn
1. Retail spend on electronic cards is growing stronger and stronger
There were 122 million transactions on electronic cards in September, up 7 percent from a year earlier.
The average value of transactions was $49, with 55.2 percent spent on debit cards and the rest spent on credit.
Electronic cards have far surpassed cash spending in core retail sales. They now make up 67.8 percent of core sales and 61.7 percent of total sales processed in New Zealand.
This announcement comes after hype surrounding the new banknotes release, yet less than half of shoppers are still using cash to pay for shopping.
The Reserve Bank’s deputy governor and head of operations, Geoff Bascand, recently said only about 30 per cent of retail spending was now in cash.
Despite this, the Reserve Bank says at the end of June, cash in the hands of the public jumped 7.6 percent, so cash is worth investing in.
Retailers should take note of the prevalence of card spend, particularly if they haven’t updated to the latest POS systems, like contactless payments.
2. Food prices are creeping up
Food prices were up 0.7 percent in September, slightly above August’s 0.4 percent increase.
Restaurant meals and reader-to-eat food prices had a considerable increase, rising 2 percent, while grocery food prices were down 1.5 percent due to lower prices for things like milk, yoghurt and cheese.
3. Retailers are feeling more optimistic
Despite overall business confidence hitting a four-year low, retailers are in positive spirits in the three months ended September 30.
A net 7 percent of retailer surveyed in New Zealand Institute of Economic Research’s quarterly survey were expecting improved sales, while a net 10 percent expected sales to improve in the next six months, up from a net two percent.
This may be a result of core retail sales hitting $4.03 billion in September, an increase of 1.2 percent.
4. Consumers aren’t feeling as optimistic
The outlook for economic activity in the next couple of months isn’t buoyant, while consumer confidence has hit a three-year low.
Household spending growth is slowing from around 3.8 percent over the past year.
Westpac senior economist Satish Ranchhod expects this to drop a little below two percent.
“While high levels of migration and strong tourist demand continue to provide support for retail activity, over the coming months we do expect to see some softening in spending growth,” Ranchhod says.
“Consumer confidence has fallen sharply, and a likely softening in economic growth will weigh on employment and earnings growth over the coming year.”
5. But other factors may get consumers opening their wallets more
BNZ’s latest report is slightly more positive than the doom and gloom predicted by many.
It reported retail spending in September was up 5.5 percent on last year, bolstered by strong school holidays spending, while spending for the year is up 2.5 percent on the year previous.
Wednesday 30 September in particular was impressive, with a 17.9 percent increase in spending compared to last year.
It also attributed good sales to warmer weather encouraging more shoppers to the streets.
In the week ending 4 October, there were 5.5 percent more transactions made than the previous year.
If sunshine and holidays are two factors that encourage more spending, things are looking up for retailers in the next quarter.