Last year’s events caused significant disruption to the retail industry, however recent Paymark statistics show that the month of December was 2020’s saving grace.
In the June quarter of 2020, which included the Level 4 Lockdown, payments through Paymark via an underlying set of Core Retail merchants dropped 15.5 percent from a year earlier in dollar terms. However, as the year closed to an end and with no Lockdown in place, payments increased.
Spending in total through Paymark was $42.6 billion, an underlying increase of just 0.1 percent. The average spend on each transaction across all cards increased from $39.04 to $42.58, unsurprising in light of Covid.
Within the Core Retail sector there are the three large groups, the stores selling food and liquor, the hospitality sector, and the merchants who sell the day to day goods that we require, like clothes, computers, furniture, cosmetics.
Spending remained strong throughout the year for stores selling food and liquor, with an 11.5 percent growth rate for the 12 months. For hospitality merchants, spending was down by 4.5 percent for the year.
For the food and beverage services, there was an overall decline of 12.1 percent for the year, although December’s quarter did see a 2.7 percent increase.
With the Lockdown putting domestic travel on pause, the accomodation sector saw a 30 percent decrease in payments, which was still running at this level in the December quarter.
For merchants selling day-to-day goods, consumer spends were at a 3.2 percent decline for the year, however had resumed growth in December, in this case to 6.7 percent.
Taking a look at the regions, spending for the year in Auckland/Northland was down by 3.2 percent, Otago down by 7.1 percent and South-land down by 1.9 percent. Smaller North Island regions however saw an increase in spending, with Wairarapa at an increase of 10.7 percent, Wanganui 7.9 percent, Gisborne 6.2 percent, Taranaki 6 percent and Hawkes Bay with a 6 percent increase.
With the exception of the West Coast, all other regions recorded higher growth rates in the last quarter of 2020, a promising way to approach a new year of retail.