December retail spend up but surprisingly modest

Retail spending in December was surprisingly modest, according to Paymark's seasonally-adjusted figures released yesterday.

Paymark, which process about 75% of all electronic transactions in New Zealand, said December spending was up for the third month in a row, but the seasonally-adjusted total spend increased only 0.5% from November to December.

Despite the positive spending in the week leading up to Christmas, the December month in total increased a below average 2.3% year-on-year, in real terms.

Paymark head of sales and marketing Paul Whitson said the fact there were five Sundays and Mondays during December, typically slower days of the week, compared with only four in 2011, affected the raw year-on-year comparison and sometimes did not tell the full story.

However, what Mr Whitson did not point out that one of those Mondays was Christmas Eve when people traditionally do a lot of last-minute spending.

Otago retailers did comparatively well compared with most other areas. December transactions were up 4% compared with December 2011 and their value was up 3.6% on the previous corresponding period. Canterbury's increases were 6.4% and 3.6% respectively. Hawkes Bay transactions rose 4.3% on the previous period but the value only rose 2.7%.

Paymark figures showed annual spending growth throughout December was high among cafes and restaurants (up 7.1%), liquor retailers (8%) and department stores (6.3%).

Also, housing-related spending was still strong during December as people spent up at appliance stores (up 10.3%) and hardware stores (9.2%).

It also appeared that many households welcomed new members, or spoiled existing ones, with spending in pet shops rising 7.5% in December from December 2011.

Nationwide, during December, the volume of card transactions was 3.6% higher than a year ago, with debit card value increasing faster at 3.1% than credit card value, up 1.4%.

''When you look at 2012 as a whole, spending through the Paymark network has risen by 3.3% in value and 3.2% by the number of transactions,'' Mr Whitson said.

In 2012, Paymark processed 932 million transactions, totalling $46.5 billion. The average transaction value of $49.92 was 0.2% above the 2011 average.

Those annual growth rates remained below those recorded before 2008, which was indicative of slower economic growth since the global financial crisis, he said.

One of the promising features of 2012 was the relatively strong finish.

''We hope to see this momentum continue into 2013.''

Paymark realised the going was still tough for retailers, Mr Whitson said.

 


At a glance

Otago December retail spending

• 2011: 4.43 million transactions; valued at $243.7 million.

• 2012: 4.61 million transactions valued at $252.5 million.


 

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