Monday 7th January 2019
|Text too small?|
December retail sales using electronic cards were relatively flat, rising 1.2 percent by value compared with the 5 percent growth shown in the preceding 11 months.
The 120.7 million transactions, up 2 percent, were worth more than $6 billion, but that value was held down by no growth at all in Auckland and Northland, according to Paymark, which accounts for more than 75 percent of the country's electronic transactions.
The value of the Auckland and Northland transactions accounted for $2.4 billion, more than a third of the nationwide total. Sales were at their most brisk in Whanganui, up 6.6 percent from a year earlier, in Palmerston North, up 5.8 percent, and in Southland, up 5.7 percent.
Retail sales in South Canterbury were worse than sluggish, easing 0.1 percent compared with December last year. Sales in the rest of the region were up just 0.7 percent.
Sales in the capital were up only 0.6 percent on December 2017.
“Paymark transactions reached new highs before Christmas and over the month in general but figures also point to several pressures on merchants,” says Darren Hopper, head of e-commerce at Paymark.
“The annual growth rate was generally low and below the rate of the recent months that would have shaped retailer expectations,” Hopper says.
“We also saw widespread discounting which appears to have accelerated the trend towards lower average transaction value.”
The only listed retailer to have reported Christmas sales to date, outdoor clothing company Kathmandu Holdings, said last week its sales fell short of expectations, falling 1 percent in the 22 weeks ended Dec. 30.
The decline was much worse in New Zealand, down 2.4 percent in stores open a year or more, compared with Australia’s 0.2 percent fall.
Paymark says the growing use of scheme credit and debit cards is another pressure adding to the bank fees retailers have to pay.
“The majority of Paymark transactions are still with traditional bank-issued debit cards, accounting for 70.7 million transactions in December out of the total of 120.7 million transactions, but that was 2.1 percent fewer than in December 2017.
Across all cards, the average transaction was $49.77, down 0.8 percent on the previous December.
“The average transaction value has been falling for several years as cards are increasingly used for lower-valued transactions but the recent decline also reflects downward price pressure within some sectors,” Paymark says.
But the known factor of falling fuel prices had a negligible effect on the change in average transaction value across all sectors.
“More significant was the lower price of electronic and electrical goods, showing as a 15.2 percent lower average transaction value amongst electrical and electronic goods retailers,” the card payments processor says.
“Anecdotally, there were also many sales, starting back on Black Friday – Nov. 23 – and this may have pushed the average transaction value lower as well, although this is difficult to see in Paymark figures as only the total transaction value is recorded,” Hopper says.
“There may have been more, or fewer, items than usual within each transaction as well.”
Among other types of merchants, sales through toy retailers were up 11.3 percent on the previous December and hardware and home decorating stores recorded a 6.1 percent increase.
Sales through chemists, up 5.5 percent, and those of supermarkets and liquor stores, up 3.9 percent, were relatively strong but still below the increases recorded in earlier months.
That went for sales through restaurants, bars and cafes too, although their sales were up 6.3 percent on the previous December.
NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.
No comments yet
Rio Tinto reiterates Tiwai position as aluminium prices stay weak
TIL downgrades earnings by up to 40%, suspends first-half dividend
Govt accounts unexpectedly in the black as lumpiness continues
17th January 2020 Morning Report
Gentrack loses investor support with vague downgrade
Margin pressure continues at Michael Hill although sales rise
House prices hit fresh records as sales stepped up in December
16th January 2020 Morning Report
NZ dollar eases ahead of US-China trade deal signing
Gentrack shares plunge as it gets cold shoulder from UK’s E.ON