Core retail sales dip in July

Supermarket and grocery store sales were up 1.9pc last month, says Statistics NZ. Photo / Greg Bowker

Seasonally adjusted core retail sales - which exclude the four vehicle-related industries - edged down 0.1 per cent in July, Statistics New Zealand (SNZ) says.

While supermarket and grocery store sales gained 1.9 per cent and sales in cafes and restaurants lifted 4.3 per cent, recreational goods retailing fell 7 per cent and liquor retailing fell 9.3 per cent.

Recreational goods had been the largest contributor to the June rise in core retail spending, when the category gained 9.6 per cent.

Total retail sales fell a seasonally adjusted 0.4 per cent in July from June, following a 1 per cent rise in June.

Vehicle sales fell 2.3 per cent - having fallen 0.8 per cent in June but gained 7.6 per cent in May - and automotive fuel sales fell 1.3 per cent.

In actual terms, total retail sales were up 2.2 per cent or $116 million in July from a year earlier. Core retail sales rose 1.7 per cent or $67m over the same period.

ASB economist Christina Leung said the retail numbers pointed to a slowing in the recovery in retail spending, following a strong result in June.

"Many of the categories that recorded strong growth in June reversed out part of the gains in July, including spending on recreational goods, department stores and liquor," she said. "The declines in spending in the tourist-related categories such as accommodation and bars and clubs (down 2.4 per cent and 6.1 per cent, respectively) was surprising given the increase in visitor arrivals in the July month."

Leung said the small decline in retail spending in July was "slightly disappointing, particularly given the declines in spending on discretionary items."

"However, the result does follow a substantial increase in June and given the monthly volatility in this data overall the result points to a recovery in retail spending taking place," she said.

This was illustrated by the fact that the sales trend for both total and core monthly retail sales values were now at the highest levels since the series began in May 1995.

"Nonetheless, the recovery appears to be taking longer to take traction than the Reserve Bank initially thought, and today's result reinforces our expectations that the Reserve Bank will leave the OCR on hold until the start of next year," said Leung.

- NZPA/ HERALD ONLINE