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NZ retail sales grow more than expected

Wednesday 15th February 2012

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New Zealand retail sales grew more than expected as people bought more at supermarkets and spent more on petrol in the final quarter of 2011.

The total volume of spending rose 2.2 percent to a seasonally adjusted $17.37 billion in the three months ended Dec. 31, according to Statistics New Zealand. That’s more than the 0.8 percent pace forecast in a Reuters survey of economists. Excluding motor-vehicle related spending, core retail sales grew 2.9 percent to $13.7 billion, the fastest pace since the series began in 1995.

The value of retail spending, which accounts for both sales volume growth and rising prices, climbed 2 percent to $17.67 billion, and was up 2.3 percent excluding auto-related spending. Retail expenditure was up an actual 8 percent to $19 billion, well ahead of the 5.5 percent growth economists were picking.

Spending on supermarket and grocery items climbed 1.3 percent to a seasonally adjusted $4.5 billion, while fuel expenditure climbed 6.4 percent to $1.92 billion. In volume terms, supermarket spending rose 1.8 percent, while fuel spending increased 4.8 percent.

“Big increases in supermarket and fuel sales have boosted this quarter’s figures,” said business statistics manager Louise Holmes-Oliver in a statement. “Rugby World Cup visitors and the delayed start to the spring school holidays have probably contributed to the big sales increases we’ve seen in these two industries.”

New Zealanders’ appetite to spend has been muted over the past 18 months as households repaid debt rather than borrow to buy things, and the latest ANZ Roy Morgan consumer confidence survey found people were “listless and fickle”.

Still, spending on credit and debit cards rose last month, signalling an improving mood, and New Zealand retailers have had mixed results over the summer.

Last month, Warehouse Group, the nation’s biggest listed retailer, cut earnings guidance and blamed tighter margins in the apparel segment, while clothing retailer Hallenstein Glasson reporting a 25 percent lift in first-half earnings and homeware chain Briscoe Group flagged a bigger annual profit.

The value of spending on clothing, footwear and accessories was edged up 0.1 percent to $896 million in the quarter, with volumes up 0.8 percent.

Retailers selling electrical and electronic goods continued to discount their products, with the value of spending up 7.2 percent to a seasonally adjusted $714 million on a 10 percent increase in the volume sold. Statistics NZ said some respondents reported smartphone sales had a positive impact on the figures.

Competition has been tight in consumer electronics, with Woolworths recently saying it will shut stores in its Dick Smith chain and ultimately put the retailer up for sale. At the same time, ASX-listed JB Hi Fi reported New Zealand was the stand-out performer in its recent first-half earnings.

The latest period captures the finals rounds at last year’s Rugby World Cup, and today’s figures show the value of spending on accommodation and food and beverage services rose 3.4 percent to $1.78 billion and 3 percent to $1.78 billion respectively.

It also captures the traditionally busy Christmas period, and spending at department stores increased in value by 5.6 percent to $959 million on a 7.2 percent lift in volume. Bolstering that figure was the reopening of two Christchurch department stores in the quarter.

The value of actual retail stocks crept up 0.3 percent to $6.28 billion at the end of the December quarter, led by a 26 percent increase at department stores to $717 million, and a 13 percent rise in food and beverage services to $132 million.


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