Facts and figures
The overall retail industry, which also incorporates accommodation and food and beverage services, rose from $78.76 billion in the year to March 2015 to $82.39 billion in the year to March 2016. It is now worth $87.14 billion (for sales up to March 2017).
For this article, however, we have analysed the following retail sectors as categorised by Statistics New Zealand’s NZSIOC (New Zealand Standard Industrial Output Classification) groupings.
They are: Motor vehicle, motor-vehicle parts and fuel retailing (GH111 and GH112); Supermarkets, grocery stores and specialised food retailing (GH121 and GH122); Furniture, electrical and hardware retailing (GH131), Recreational, clothing, footwear and personal accessory retailing (GH132); Department stories (GH133); Pharmaceutical and other store-based retailing (GH134); Non-store and commission-based retailing (GH135).
The AES survey results represent the activity of 48,386 units involved in the retail trade.
The financial year reported is April 1 to March 31 for all of those categories except for the department stores section, which has a July 31 balance date.
Statistics New Zealand’s AES survey results are provisional for two years. The AES 2015 results have been revised since they were first released, and the data used by NZ Retail is the latest available. However they will not be final data until the AES 2017 is released in June. Likewise, AES 2016 results will not be finalised until the release of AES 2018.
The AES figures used here are total income figures. Total income is slightly higher than total sales due to the inclusion of items such as interest received and non-operating income.
Susan Hollows, the Statistics NZ manager for the Annual Enterprise Survey (AES), describes the 5.4 percent growth measured by the survey in 2016 as “strong”. In 2015, retailing total income increased by 4.4 percent, and in 2014 it increased by 3.5 percent.
Several factors are likely to have helped boost total retail sales in that period, including population growth and tourism, says Hollows.
The population of New Zealand grew from 4.580m in March 2015 to 4.676m in March 2016, an increase of 96,000 people, or 2.1 percent.
Meanwhile there was also a 7.5 percent increase in international guest nights in that year.
She also notes that price increases in the year ending March 2016 remained relatively stable, with the Consumers Price Index (CPI) increasing only 0.4 percent over the year.
Typically, increases in total income are caused through a combination of volume and price changes. However in the AES 2016 year, overall price changes were low, meaning that it was an increase in sales volume, rather than inflation, which was the more crucial factor in the increased total income of the retail trade.
The AES figures are not adjusted for price changes and the survey is presented in current prices. Statistics New Zealand’s Retail Trade Survey, which reports on retail sales each quarter, does remove price changes. But generally, the trends for both total retail sales volumes and values have been rising since mid-2009.
Changes to levels of households’ disposable income are another factor that can impact on retail sales.
Rising house prices tend to encourage homeowners to spend more as the equity in their homes increase, and they can potentially borrow more against that.
This is a likely reason that the 2016/17 financial year was a relatively buoyant one for retailers. The AES 2017 survey won’t be released until June but quarterly reports from Retail NZ and Statistics NZ show that the skyrocketing housing market - at that time - boosted consumer confidence among those with mortgages in the 2016 and 2017 financial years.
By contrast, in the past year, as the house market has cooled (and as prices have even declined in Auckland and Christchurch), there appears to have also been a slowdown in consumer spending.