Durables lead drop in retail

Christmas shopping may not have been as strong as earlier indicated, judging by electronic card transaction data released yesterday.

Statistics New Zealand figures provided a mixed bag of results for December card spending.

Retailing spending using electronic cards reached $6 billion in December, up $304 million, or 5.3%, from December 2014 - the highest-ever monthly figure.

However, when adjusted for seasonal effects, retail spending was down 0.2% in December following a 0.2% rise in November.

"While card spending was up in five of the six retail industries in December, a significant fall in the durables industry has lowered overall card spending in the retail sector,'' Statistics NZ business indicators manager Clara Eatherley said.

The largest retail movements in December were in durables, down $21 million, or 1.8%, and hospitality, up $13 million, or 1.6%.

Core retail spending, which excludes the vehicle-related industries, fell 0.4% in December following a 0.3% rise in November.

Trends for the total retail and core retail series had generally been rising since the series began in October 2002 but appeared to be easing in recent months, she said.

ASB senior economist Jane Turner said the data showed household spending dropped off in December.

The fall was largely driven by the third consecutive fall in durable spending.

"This downward trend is slightly concerning. The 2015 fourth-quarter retail survey, released next month, should provide an indication of what has been driving these falls.''

Hospitality had another strong month with growth of 1.6%, in line with anecdotes of a particularly strong tourist presence in December.

Spending on fuel increased during December which was surprising given the 3.4% fall in petrol prices during the month.

 


What are durables?

A category of consumer goods, durables are products that do not have to be bought frequently. Examples are appliances, home and office furnishings, lawn and garden equipment, consumer electronics, toys, small tools, sporting goods, photographic equipment, jewellery.

 


At a glance

• Total retail card spending growth surprised to the down side in December, despite anecdotes of particularly strong spending.

• Reading not consistent with recent trends.

• Spending growth expected to recover this year.


 

 

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