The September quarter was far from a bonanza for the country’s retailers.
New Stats NZ data shows seasonally adjusted retail sales were relatively unchanged at $25 billion.
The total retail sales volume for the quarter fell 3.4 per cent compared to the third quarter of 2022, when adjusting for price effects.
The stats were announced on Black Friday, a widely-anticipated retail event with many sales.
The total value of seasonally adjusted retail sales was $31b, up 1.5 per cent.
Economists tend to watch the retail stats closely as they provide an indication of the country’s overall economic performance.
And the new data reinforced concerns a major retail association raised last week.
Retail NZ chief executive Carolyn Young told the Herald many retailers were in trouble and their survival in 2024 hinged on a successful few weeks from now to the new year.
ANZ said although retail sales volumes growth was flat, it was at least stronger than a 0.4 per cent contraction the bank had expected.
“Core retail sales volumes lifted 1 per cent, suggesting the underlying picture, while certainly not strong, is stronger than the headline read suggests.”
ANZ said households had reduced discretionary spending but there was some tentative evidence of a “bottoming out”.
Sales of hardware, building and garden supplies were up 2.9 per cent quarter-on-quarter.
“Specialised food was up 3.4 per cent, reflecting a mix of domestic demand and the recovery in international visitor arrivals,” ANZ added.
Westpac also said retail spending was stronger than expected but the overall economic picture was still sluggish and it expected a further slowdown in the coming months.
“Nominal spending levels were up 1.5 per cent over the quarter. However, that rise was entirely due to price increases,” Westpac added.
“The volume of goods sold was unchanged. That’s despite strong population growth. In other words, individual households are actually taking home fewer goods even as they splash out more cash.”
Westpac said the economy might have contracted by 0.1 per cent in the September quarter.
“Many borrowers are continuing to roll onto higher mortgage rates, consumer price inflation remains strong, and economic growth and the labour market are softening,” the bank added.
“That combination points to significant pressure on household balance sheets. However, strong population growth will help to limit the downside for spending in the face of those headwinds.”
Stats NZ said actual retail sales in the three months ending September 30 amounted to $29b, up 1.1 per cent from a year earlier.
And the total value of actual stock was $9.6b, up 1.4 per cent on the end of September last year.
“Decreases in hardware and motor vehicle retailing drove the fall in the total volume of retail sales in the September 2023 quarter, compared with the September 2022 quarter,” Stats NZ business financial statistics manager Katrina Dewbery said.
The Stats NZ values are in current prices, not adjusted for inflation.
Previously, in the June quarter compared with the March quarter, the total volume of seasonally adjusted retail sales was down 1 per cent to $25b.
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