Retail sales little changed in November

Wednesday 21st January 2009

New Zealand retail sales were little changed in November, surprising economists who had picked a decline, as motor vehicle, supermarket and grocery store sales rose.

Retail sales rose less than 0.1% in November from the previous month, seasonally adjusted, according to Statistics New Zealand. Sales fell 1.3% in October and economists had expected a decline in the latest month of 1.2%. Sales fell 4.1% from a year earlier.

The pickup in supermarket and grocery sales "may have been a response to improved cash-flows resulting from falling petrol prices and the 1 October tax cuts," said Robin Clements, economist at UBS New Zealand.

The retail data and figures yesterday showing inflation is evaporating will probably help convince the central bank to cut the official cash rate by 100 basis points to 4% on Jan. 29, with two further 50 basis point reductions in March and April, Clements said.

The New Zealand dollar traded at 51.78 US cents from, from 51.93 cents immediately before the retail report was released. The currency has tumbled about 2% in the past 24 hours.

Warehouse Group, the biggest retail on the NZX 50 Index, fell 1.9% to $3.64. Earlier this month, the retailer said sales fell 2.5% in the 10 weeks ended Jan. 4 from the same period a year earlier. Same-store sales declined 1.9%.

The central bank in July embarked on its steepest easing cycle since introducing the OCR in 1999 while the first round of income tax cuts began in October.

Core retail sales, which auto-related items, rose 0.3% in November, slowing from a 08% gain in the previous month, the government statistician said. Motor vehicle retailing sales rose 6.9% while auto fuel retailing slipped 7.3% as the price of oil declined.

Supermarket and grocery store sales rose 2.6%.

By Jonathan Underhill

Comments from our readers

No comments yet