Kiwi Eftpos, credit card retail spending well down in October

It was not a flowery outlook overall for retailers last month.

Retail spending was well down in October from the month before.

Spending in retail industries fell 0.7 per cent compared to September, down by $44 million, Stats NZ said today.

And a senior bank economist expected more lacklustre spending data in the months ahead, despite population growth.

The data emerged in the agency’s latest electronic card transaction figures this morning and covered debit, credit and charge card transactions with New Zealand merchants.

Spending on fuel was up $2.5m or 0.4 per cent month-on-month. But spending on clothes or apparel was down $7.1m (2.1 per cent).

Kiwis spent significantly less on durables such as furnishings, in which a decline of $18m or 1.1 per cent was recorded.

Stats NZ said the non-retail category, excluding services, registered a $4.7m spending increase last month, up 0.2 per cent from September.

This category included medical and other forms of healthcare, travel and tourism, postal and courier delivery and other non-retail industries.

“In actual terms, card-holders made 165 million transactions across all industries in October 2023, with an average value of $55 per transaction,” Stats NZ said.

The total amount spent using electronic cards was $9.1 billion.

Westpac senior economist Satish Ranchhod said the feeble spending was significant because it coincided with a surge in population growth.

A record overall net migration gain of 118,900 was recorded in the year to September 30.

“We’ve also seen international visitor numbers continue to trend higher,” Ranchhod added.

“Underlying the softness in spending has been tougher financial conditions, with continued large increases in consumer prices, as well as related increases in borrowing rates,” said.

“Today’s data reinforces that the economy is now in a tougher part of the economic cycle. Growth has already slowed as tighter financial conditions have been constraining demand.”

Ranchhod said with more mortgage holders rolling on to higher interest rates, further softness in spending through the holiday season and into the New Year could be expected.