NZ card spending creeps up 3.5 percent in January

Tuesday 7th February 2012

New Zealanders boosted spending on their EFTPOS cards by 3.5 percent in January, showing tepid growth, according to transaction processor Paymark.

Spending rose $128 million to $3.8 billion last month compared to January in 2011, though it was still below the average monthly growth, Paymark said. The company processes about three-quarters of all electronic transactions in New Zealand.

“Kiwis cut back on spending in January and used the month to recover from Christmas splurges, as is normal,” head of marketing and sales Paul Whiston said in a statement. “That was with January this year including an extra Sunday and Monday – typically the two slowest days of the week.”

Households have shied away from ramping up spending over the past couple of years, using historically low interest rates to repay bank loans rather than splash out on consumer goods.

That’s put a damp on retailers, such as Warehouse Group, which cut its guidance for annual adjusted profit by as much as $8 million due to tighter margins. Home ware and sporting goods retailer Briscoe Group has bucked the trend, reporting a 4.7 percent gain in fourth-quarter sales which will boost annual profit up at least 25 percent.

For the second month in a row Palmerton North showed year-on-year spending growth above the national average, up 8.7 percent. Retailers in Southland reported an 8.1 percent increase, while South Canterbury rose 8 percent and Auckland/Northland advanced 5 percent. Canterbury was the only region to experience lower sales, with spending down 1.9 percent.

Whiston said the data showed a promising trend with a 5.1 percent increase in spending related to housing activity.

“This could indicate that in spite of the patchy weather kiwis have stepped up DIY around their homes or called in the experts – in particular plumbers, who enjoyed a 17.5 per cent year-on-year increase this January,” he said.

The volume of credit card transactions grew more than the volume of debit card transactions with 3.7 per cent growth and 1.2 per cent growth respectively.

(BusinessDesk)

BusinessDesk.co.nz

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