Our take on the latest Retail trade survey (Tue 23 Feb 2021)
Retail sales volumes up 4.8%pa
Electrical and electronic spending up 22%pa
Accommodation spending down 20%pa
The key numbers...
- New Zealanders pulled back from their post-lockdown spending surge in December, with retail spending volumes down 2.7% (seasonally adjusted) from the September quarter. However, spending volumes were up 4.8% when compared to a year ago.
- Spending activity in recent months has more than made up for the hole left by lockdown, with more retail spending in 2020 compared with 2019 as retail volumes rose 0.5%.
- Spending patterns remain distorted, with the strongest spending growth occurring in electrical and electronic goods, up 22%pa, and the largest fall in spending attributed to accommodation.
- Other entertainment-based spending has seen falls with food and beverage services and recreational goods both falling, down 3.1%pa and 3.3%pa respectively.
- Hardware, building, and garden supplies; motor vehicles and parts; and department store spending were other sectors that contributed strongly to the December quarter, up 14%, 9.7%, and 9.0%pa respectively.
Retail spending patterns
Annual % changes
...and our reaction
- Decembers retail spending data spending shows consumers aren’t afraid to keep spending, buoyed by strong labour market results in recent times
- However, spending patterns have changed dramatically from a year ago. Although any savings accumulated during lockdowns in March and April are likely to have been chewed through, the substitution in spending away from overseas holidays to tangible items is still obvious.
- Spending to make the additional time spent at home more comfortable has seen considerable and sustained growth.
- Spending patterns are likely to remain distorted, with a higher appetite for spending on durable items until international tourism returns. Domestic spending just doesn’t have as much of an appetite for extravagant spending on entertainment, food and accommodation.
Latest updates
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