Billions at stake: Big appetite for food and drink helps NZ retail improve performance in September quarter

The performance of Kiwi retailers will be dissected in new stats released this morning. Photo / NZME

The country’s shops and supermarkets are hanging in there with overall retail sales up in the September quarter.

In a climate of growing concerns about inflation and a possible recession, Stats NZ released the latest retail trade survey this morning.

It showed sales were up 0.4 per cent, even when adjusted for inflation, in the three months to September 30.

That was a major improvement on the previous quarter’s performance. when sales were down 2.3 per cent.

Compared to a year ago, sales across retail were up 4.9 per cent.

Stats NZ said a leap in food and beverage sales drove much of that increase. The volume of these sales in cafes, restaurants, bars, and takeaways increased 30 per cent year-on-year.

The retail sector is a huge chunk of the economy and a major employer.

The survey covers firms including car yards, petrol stations, supermarkets, hotels, cafes and restaurants.

It measures the sales and stock of businesses that provide household and personal goods and services.

In the June quarter, seasonally-adjusted retail sales were $26 billion, or down 2.3 per cent on the March quarter.

Seasonal adjustments take into account things such as school holidays or long weekends.

ANZ had expected an increase of 1 per cent rather 0.4 per cent.

And today’s stats could provide some clues about quarterly GDP but the bank’s economists were reluctant to make bold predictions.

“Clearly, the GDP data and its components remain very volatile, and it’ll likely stay that way until border reopening impacts have washed out.”

ANZ said those impacts would probably not subisde until late summer.

“The outlook for household spending has deteriorated with Wednesday’s hawkish OCR hike from the Reserve Bank,” ANZ added.

“The RBNZ made it clear that they need spending to fall to tame inflation, and they’ll get it too – it’s just a question of how high the OCR needs to go.”

The Reserve Bank lifted the official cash rate this week from 3.5 to 4.25 per cent.

And the central bank said it recognised such aggressive hikes would probably cause a recession next year.