Our take on the latest Retail trade survey (Mon 24 Feb 2020)
Total retail volumes increased 3.3%pa
Recreational goods volumes increased 18%pa
Accommodation retail volumes down 1.2%pa
The key numbers...
- Retail trade volumes grew modestly in the December quarter, with the value of total sales increasing 3.3%pa, slightly weaker than the 4.5% growth in the September quarter.
- Spending on recreational goods strengthened from the already high 13% growth in the September quarter to 18%pa growth in the December quarter.
- Electrical and electronic goods volumes also saw notable growth in the December quarter, up 15%pa.
- Accommodation spending volumes continued to ease in the December quarter, down 1.2%pa, contributing to an overall decline in the accommodation spending over the last 12 months, the first fall since the end of 2012.
- Supermarket and grocery store spending fell 0.4%pa, the first decline since mid-2014.
Retail sales growth
Annual growth rates
...and our reaction
- Retail spending growth held up well in 2019, with considerable growth in non-essentials such as recreational goods and electronics showing that New Zealanders are still willing to splash out.
- Lower Chinese tourist arrivals throughout 2019 hit tourism spending, with accommodation spending being the only sub-industry in retail trade that declined over the 2019 year.
- Accommodation spending looks set to remain in decline as the impacts of the COVID-19 outbreak take its toll on the economy.
- On the upside, more heat in wage growth over the later half of 2019 and low unemployment is likely to hold up other areas of retail spending.
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