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NZ 2Q retail sales climbs more than expected

Tuesday 14th August 2012

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New Zealand retail sales rose more than expected in the June quarter as people spent a record amount on cars and auto-parts since the series began in 1995.

The total volume of spending rose a seasonally adjusted 1.3 percent to $17.25 billion in the three months ended June 30, according to Statistics New Zealand, led by a 7.3 percent boost in expenditure on motor vehicles and parts. That outpaced the 0.7 percent growth forecast in a Reuters survey of economists. The volume of spending on fuel fell 2.6 percent to $1.57 billion in the period, its second quarterly decline.

Stripping out motor vehicle related spending, core retail sales climbed 0.9 percent to $13.4 billion.

In value terms, which accounts for both volume and price movements, spending rose 1.1 percent to $17.62 billion, with core retailing up 0.7 percent to $13.41 billion.

The kiwi dollar rose to 81.06 US cents after the report was released, from 80.92 cents immediately before. The figures come after an ANZ Roy Morgan survey showed consumers grew more optimistic this month, with the number of people willing to buy big ticket items outnumbering those who aren't.

Retailers have had to contend with tepid consumer demand over the past couple of years as households put more of their discretionary spending into repaying debt rather than hitting the stores. That's seen an increase in discounting as stores compete for market share.

The value of actual sales rose 4.8 percent to $17.01 billion in the June quarter from the same period a year earlier, with a 13 percent lift in spending on motor vehicles and parts, and a 12 percent rise in non-store and commission-based retailing. Unadjusted retail sale volumes were also up 4.8 percent to $16.67 billion from the June quarter last year.

The seasonally adjusted volume of spending at supermarkets and grocery stores, which accounts for 23 percent of retail sales, rose 0.3 percent to $4.06 billion in the June quarter, with values up 0.7 percent to $4.21 billion.

Retailers built up their stocks 7.4 percent to $6.33 billion from a year earlier, with a 65 percent jump in non-store and commission-based retailing, an 18 percent lift in specialty food, and a 14 percent boost in cars and parts.

Consumer electronic goods retailers wound down their inventories by 3.3 percent to $505 million from June 2011. The volume of annual sales of electronic and electrical goods climbed 13 percent to $784 million, though the value fell 0.5 percent to $642 million in the same period.

Falling prices for telecommunication equipment and audio-visual and computing gear have helped keep a lid on inflation over the past year, which eased to its slowest pace of 1 percent in 13 years during the June quarter.

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