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Card statistics confirm flat Christmas

Friday 15th January 2010

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Electronic card transaction figures for December confirm a modest recovery in consumer spending but, at best, an unspectacular Christmas for retailers depending on the yuletide season to boost sales.

Statistics New Zealand released the December figures this morning, showing "core" retail spending on credit and debit cards continued to be flat through the month, with a trend rise of just 1% since June last year. 

However, non-core retail electronic spending was up a respectable 3.6% on sales in December 2008, when the global financial crisis was fresh, and total retail sales were heading downwards.

"These figures confirm a steady but cautious return to spending growth," said ASB economist Nick Tuffley. "People weren't too wild over Christmas."

In contrast to pre-crisis times, people were also spending more within their means, so growth in domestic credit as measured by the Reserve Bank also showed that fewer consumers were using credit cards to splash out at Christmas.

"People have been resorting to spending money they actually have," Tuffley said.

Credit card use accounted for 44.6% of all electronic transactions in December, an increase on the previous two quarters, and ends a general decline since the March quarter of 2008 level of 47.7%, which was around when New Zealand's recession began to bite.

Total electronic card transactions increased 0.7% by value between November and December, but that partly reflected fuel price increases. Once automotive purchases are stripped out, month on month core retail growth was lower, at 0.4%.

When transactions outside the retail sector are included, growth declined further, to 0.3%.

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