Spending across New Zealand rises, but especially in the South

John Bezett.
John Bezett.
Wallets appear to be opening in the south as Paymark figures show something of a retail boom in Otago and Southland.

But Dunedin jewellery retailer and member of the Dunedin City Council John Bezett has some words of warning about increased spending not translating straight to a bottom-line comparison.

The Paymark figures showed Southland's annual retail spending for the year to June rose 8.5% to $88.8 million, the strongest percentage increase in the country.

Otago spending for the same period rose 6.8% to $203.1 million and Canterbury spending rose 6.5% to $465 million.

Transaction volumes rose 7.8% in Southland, 6% in Otago and 8.3% in Canterbury in the period.

Mr Bezett, of Bezett JT Jewellers and Watchmakers, said the ''word on the street'' was of improved sales.

In his own case, his sales were marginally ahead of last year, which was a good year.

''I am quite happy with the way my business is going this year. Retailers are never very happy.''

April and May were quiet months for Mr Bezett, but by the end of May, sales had picked up.

June went well and the start of July was good, without being outstanding, he said.

Mr Bezett said some care needed to be taken in analysing retail sales figures.

It was easy for retailers to increase their turnover by dropping prices, doing some advertising and having special deals.

Turnover would increase, but the profit would not necessarily increase.

Mr Bezett ran more of a specialised business, having built up a base of customers in the more than 40 years he had been trading in Dunedin. He did not indulge in price cutting wars with competitors.

He kept in contact with other retailers to get a feel for what was happening.

When the council previously did head counts, the Golden Block was the leading retail area in the city, followed by Edinburgh Way, where Mr Bezett is, the block dominated by the Farmers was third and Lower Stuart St was fourth.

''We are where the action is in Dunedin,'' he said.

''We have no business association now because most shops on George St are part of national chains or owned by overseas interests.''

Paymark head of customer relations Mark Spicer said election years had been known for their faster economic growth, and 2014 spending through the Paymark network hinted the election cycle was under way again.

But the experience was mixed across regions and sectors.

Nationwide spending through the network for the year ended June was up 7.3% nationally, in contrast to growth rates in the 2013 and 2012 June years where growth sat at 3.6%.

In the past three years, total spending through Paymark had increased 15.2%.

Canterbury had been at the forefront of growth over the past three years, particularly in the past two years, during which spending increased by 17.6%.

Auckland had growth of 17.6% during the past three years and Palmerston North 20%, illustrating the wider nature of the recovery.

The average spending increase per merchant during the three years was 10.4%.

Sectors with above average per-merchant spending growth included hardware stores (34.7%), cafes/restaurants (21.7%) and the automotive sector (16.3%), where higher petrol prices contributed.

Spending increased at a lesser rate for clothing retailers (7.7%), chemists (3.4%) and fruit produce retailers (1.1%).

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