Our take on the latest Retail trade survey (Tue 23 Nov 2021)
Retail sales volumes fell 8.1% (sa) in the September quarter
Food and beverage spending fell 19% (sa)
Total stocks grew 3.6% (sa)
The key numbers...
- Retail spending volumes fell 8.1% (seasonally adjusted) in the September quarter, as the Delta lockdown brought strong spending momentum to a grinding halt.
- Unsurprisingly, tourism-related activity suffered the worst, with food and beverage services spending falling 19% (sa) and accommodation spending falling 12% (sa).
- Department store, homeware, and building and garden supplies also took significant losses, each falling 24%, 18%, and 15% (sa), respectively.
- At-home spending remained high throughout, like during the first lockdown, with supermarket and grocery store spending up 7.5% (sa).
- The lack of spending, and higher import levels, saw total stocks grow 3.6% (sa) from the June quarter, and are now 12% higher than a year ago.
Seasonally adjusted retail sales
$m (Sept 2010 prices)
...and our reaction
- The Delta lockdown was obviously going to be a blow for retail spending, but as we noted at the start of Level 4 in August, the spending hit hasn’t been as damaging as when COVID-19 first broke out in New Zealand.
- The September quarter included a strong first six weeks of spending, followed by six weeks of restricted trading under higher Alert Levels. That stronger underlying trend saw spending activity sitting 2.5% higher than the pre-pandemic September 2019 quarter.
- The Auckland/Northern lockdown will continue to hamper activity into late 2021, with the staggered relaxation in restrictions providing some relief to retail stores, with hospitality still severely limited until we move to the Traffic Light system.
- Stocks managed to recover in the September quarter, as demand was restricted, and production and imports continued for many businesses. Stocks will be under pressure again as we shift to the Traffic Light system and head towards Christmas.
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