Electrify NZ Tauranga's Dan Wallace, Teagan Gregg and Robin Killip. Photo / Mead Norton
New consumer data reveals the impact soaring fuel prices are having on spending habits, a retail boss says.
Stats NZ retail electronic card transactions for the March 2022 quarter showed national spending on fuel jumped $44 million - up 2.7 per cent compared to the December quarter.
New data releasedby Worldline NZ also showed consumer spending last month reached $188 million in the Bay of Plenty, up 3.8 per cent on last year - and up 18.1 per cent on 2019.
Retail NZ chief executive Greg Harford said the rising cost of fuel likely contributed to the small increase in spending in the Bay of Plenty.
"While feedback from Bay of Plenty members is that it is tough out there, it could indicate that Bay businesses are in slightly better shape compared to other regions.
"Some of that will be driven by travellers, particularly with two long weekends in June but a good part of it will likely be driven by higher spending on fuel."
Harford said spending was slightly down nationally compared to last year overall but the amount spent on fuel was up "significantly".
"This reflects the high price of petrol at the moment but also suggests that consumers are reprioritising their spend to take account of this.
McCombe said the impact of fuel costs affected many other areas, such as the cost of transporting food to supermarkets.
Rotorua Budget Advisory Services manager Pakanui Tuhura said the impact of fuel costs depended on where people lived, where they worked and where their children's schools were.
Rising fuel prices would likely hit people's pockets harder in Kawerau with its dependence on forestry and milling, and Tauranga where people tended to live further from their workplaces.
Tuhura said people were also getting less food for the money they spent.
"People were using debt to cover the increasing food cost. Now they are trying to repay the debt incurred.
"People don't seem to be changing their retail shopping habits here in Rotorua except they are doing more shopping around for bargains."
Nationally, consumer spending through core retail merchants excluding hospitality in Worldline NZ's payments network reached $2.76 billion in June 2022, up just 1 per cent on June last year.
Worldline's head of data George Putnam said while national spending was higher than last year, the rate of spending growth was well below the latest reported annual inflation rate of 6.9 per cent.
The comparative figures clearly point to the slowness of the current economy, he said.
"With spending lifting only marginally above year-ago levels while inflation is running somewhat higher suggests people are having to cut back on the amount they purchase."
Putnam said the first Matariki long weekend on June 24-26 provided a welcome boost to regional cafes, restaurants, hotels and motels.
Spending reached $112m – up 0.9 per cent on the same non-holiday Friday to Sunday of 2021 and 12.8 per cent on the same weekend in 2019.
More interest in biking as fuel costs rise
The rise in fuel costs had sparked more interest in alternative forms of transport.
Electrify NZ Tauranga owner Dan Wallace said he had seen an uplift in e-bike sales for people commuting shorter distances.
Wallace said it had been a slower month than usual compared to last year but this was likely due to the weather.
"It has not stopped raining."
There had been a rise in people ordering e-bikes and he had a 40-foot container full of high-end bikes arriving soon that had already been sold.
Wallace said it was a "double-edged sword" because while demand had gone "through the roof" during the Covid-19 lockdown the industry was struggling to import high-end bikes fast enough.
Heidi Hughes, director of the Wednesday Challenge - which encourages Tauranga people to use alternative modes of transport each Wednesday - said there had been a "big uptake" since it launched in March.
"We are so exposed as a community if we are reliant on petrol.
"If we don't start getting our heads around [alternative transport] now, we are exposing the community to making the decision between petrol and food."
My Ride Rotorua owner Sam Casey agreed retailers were still doing it tough and the little rise in the region's consumer spending was driven by people paying more on petrol.
"We have seen a few bike sales because of fuel prices in the last month.
"Jumping on a bike is basically free.
"For people close to town it is an easy option. People would rather bike to work than spend money on petrol."
Casey said sales had been affected slightly.
"Foot traffic is definitely down and so is spending slightly."
He said the drop was likely due to the weather.
"We are an outdoor activity and the weather has put a bit of a dampener on that. I think we will start seeing more activity once it gets warmer."