Wednesday 17th April 2013
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By Paul McBeth
New Zealand retailers kept a lid on first-quarter inflation as they slashed prices in a bid to attract cautious households unwilling to ramp up their spending.
The consumers price index rose 0.4 percent in the March quarter, in line with expectations, and was held back by aggressive discounting of household appliances and clothing. About 22 percent of prices collected from clothing and footwear retailer was discounted in the quarter and 27 percent of household contents and services were marked down in the period.
"Discounting of household items and clothing was even more aggressive in Q1," ASB economist Jane Turner said in a note. "Discounting was particularly elevated over Q4, and we had expected to see some unwinding of this."
Some 40 percent of major household appliances were discounted in the quarter, the biggest proportion, followed by audio-visual equipment with 36 percent marked down. A third of carpets and other floor coverings, and glassware, tableware and household utensils were discounted, and 29 percent of women's clothing was reduced.
ASB's Turner said the strength of the kiwi dollar, which recently traded at 84.82 US cents, has held down the cost of imported goods, "it appears the extent of discounting is even greater than what the currency suggests."
Today's data showed clothing prices fell 0.9 percent in the March quarter, and were down 1.2 percent on an annual basis, while household contents prices decreased 1.2 percent in the three months for an annual drop of 2.6 percent.
That discounting may have helped some retailers boost sales, with clothing chain Hallenstein Glasson a 6.6 percent gain in sales to $115.7 million in the six months ended Feb. 1 from robust buying in New Zealand, and homeware and sporting goods chain Briscoe Group increasing annual sales of its homeware stores 4.3 percent to $307 million.
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