Retail spending continues to climb

Dougal McGowan
Dougal McGowan
Retail  spending continued to rise in the three months ended September, with much of the increase in the quarter related to the volatile vehicles and fuel categories.

The 0.9% rise in September follows the large 2.2% gain in June and left retail spending up for the year by a solid 5.3%, according to Statistics New Zealand figures released yesterday.

Otago Chamber of Commerce chief executive Dougal McGowan said the national figures followed on from his checks with retail members of the chamber.

Earlier this year, shoppers were encouraged by low interest rates to complete home renovations and buy large-ticket items, such as cars, and new items for the home, such as televisions and whiteware.

The last two weeks of ``different weather'' meant people had turned their focus to early Christmas shopping with indications people were shopping earlier than ever to help spread the load.

``Until we get the credit card and electronic card data, we won't know for sure, but people are definitely moving on from renovations to other types of shopping.''

Some longer-term interest rates were starting to move higher as banks found their funding costs rising and Mr McGowan issued a warning for people to not overcommit to debt in the lead-up to holiday shopping.

Sales were above year-on-year average but much of that was due to population growth.

Large retailers were advertising sales much earlier this year and he had noticed the first Christmas advertisements appearing late last month.

The local hospitality industry was starting to benefit from incoming cruise ships but it was too early to tell if the increased foot traffic from tourists was showing up at the tills, Mr McGowan said.

``I hope retailers can get a good spend in a quiet time as the students leave town. The holiday season spending is important in Dunedin as it tides retailers over until the students come back.

``Retailers are working hard to maintain their market share, particularly with the increase of online shopping.''

Westpac senior economist Satish Ranchhod said nationally, there were increased gains during September in spending related to hardware and building supplies as well as increased spending on recreational goods and accommodation - the last of which reflected the strength of the tourist season.

The increases were balanced against a pull back in spending in some other categories following gains in June.

Looking at prices, Mr Ranchhod said retail price inflation remained low but it had been starting to lift.

During the past year, he estimated core retail prices rose 0.5%, the fastest rate of increase in five years.

``Softness in prices has been a key factor that has supported spending in recent years. This will be a key area to watch over the coming months, especially given signs demand in the economy is lifting.''

The release of the retail data from Statistics NZ was delayed because of last week's earthquakes.
 

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