Electronic cards spending on rise

Christmas electronic card spending made December the third consecutive month of increased retail spending and the highly competitive DIY suppliers Mitre 10 and Bunnings reflected gains of more than 9% in recent financial results.

Card spending in retail increased by 0.3%, or $11 million, with fuel the only retail sector to decline, down $24 million, or 3.5%, according to Statistics New Zealand data released yesterday.

In a separate release yesterday, covering the first six months of the present financial year, sales for Mitre 10 were up 9.1%, while competitor Bunnings, for the year ended June, last week booked a revenue increase of 9% to $637.3 million, albeit posting a loss for the year of $2.6 million.

ASB economist Daniel Smith said the broad-based December strength was also seen in November figures and suggests stronger retail spending in the last quarter of 2012, than was seen in ''the somewhat lacklustre'', third quarter.

While the December increase continued a trend of slow but steady increases during most of 2012, Mr Smith questioned how much of that improvement would carry through to wider retail and consumption activity.

Mitre 10 chief executive John Hartmann said for the first six months of the new financial year, Mitre 10 year-to-date sales figures were up 9.1% on the previous comparable period.

''Mitre 10 also had a very strong December month with sales up almost 10% overall, including a building products jump of 23.4% on the previous December, hardware and gardening up 7.6% on last year and renovation and decor product lines up 6.5%,'' Mr Hartmann said in a statement yesterday.

In October 2012, Mitre 10 posted full-year sales figures of $858.37 million, and a rebate to members of more than $45 million, with sales figures up 6.5% on the previous year.

Mr Hartmann said Mitre 10 ''seems set to comfortably maintain its position'' retaining the number one home improvement retailer position it has held for the previous two years.

Mitre 10 has plans for another eight Mitre 10 Mega stores to be completed before the end of 2014, he said.

While earnings before interest and tax for Australian-owned Bunnings rose 4.9%, to $A841 million ($NZ1.05 billion) it was hit by higher costs and administration expenses, up respectively 11.4% at $133.2 million and 51%, at $23 million, contributing to the annual loss of $2.6 million, Stuff reported last week.

Mr Hartmann said while overall Mitre 10 sales were up more than 9% across all stores, the Mitre 10 Mega store sales were up 14%. The average transaction value was up almost 6% and customer numbers, measured by transaction numbers, were up 3%. Christchurch retail activity has risen strongly for a second consecutive quarter, bucking national trends, APNZ reported earlier this month.

Since the June 2010 quarter, before the earthquakes began, Christchurch's total retail activity has risen 6.8%, compared with the national increase of 8%, but was closing that gap.

Total retail activity in the recovering city increased 2.1% in the September 2012 quarter, following a 2.5% jump in the previous quarter, Statistics New Zealand said.

''Christchurch's sales growth fell behind the rest of the country after the quakes began,'' industry and labour statistics manager Tehseen Islam said.

''But strong rises in the past two quarters, coupled with this quarter's decrease in national retail figures, has helped to narrow that gap,'' APNZ reported.

 

 


Transactions
Spending on electronic cards in December

 

Value of transactions: $6.8 billion

Total transactions: 122 million

Average spend: $56

(Electronic transactions are about 65% of retail spending).

Source: Statistics New Zealand


 

simon.hartley@odt.co.nz

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