Kiwi's spending in November was flat. Photo / Alex Burton
Kiwi's spending in November was flat. Photo / Alex Burton
Spending in November was sluggish, according to new Stats NZ data.
The electronic card spending data showed spending in the retail industries was unchanged compared to October 2024, even when factoring in Black Friday and a reduction in interest rates.
Spending in core retail industries increased by 0.1% or $3.2million.
Hospitality’s resurgence continued with spending up by $17m (1.4%) compared to October.
Spending on fuel and consumables also increased, up by $6.2m (1%) and $12m (0.4%) respectively.
The non-retail (excluding services) category decreased by $35m (1.5%) from October 2024.
That category included medical and other healthcare, travel and tour arrangements, postal and courier delivery, and other non-retail industries.
The total value of electronic card spending, including the two non-retail categories (services and other non-retail), was down compared to October by $6m (0.1%).
In actual terms, cardholders made 171 million transactions across all industries in November 2024, with an average value of $56 per transaction.
The total amount spent using electronic cards was $9.6 billion.
Senior economist Satish Ranchhod from Westpac Bank believes the cost-of-living crisis is a key driver of low spending, even heading into the holiday period. Photo / Greg Bowker
Wallets still closed
Westpac senior economist Satish Ranchhod said the results were a “pause for breath” in the recovery of retail spending.
“We did see some flat spending in November, but that follows some solid gains over the past couple of months,” Ranchhod said.
He said it was important to remember that petrol prices rose over the past month, which would have dampened spending in other categories.
“I think interest rate cuts are going to be a really supportive factor of spending as we go into the holiday season and into 2025,” Ranchhod added.
Ranchhod expects households to be more confident in what’s in their back pocket and return to spending closer to mid-next year.
Hospitality has seen continued growth over recent months, and Ranchhod believed the Government’s tax cuts could be one reason why.
“What we are seeing is a pick-up in spending and some discretionary areas.
“The notable one is hospitality, which has actually risen about 5% since tax cuts began hitting people’s pockets.”
ASB economists Yen Nguyen and Mark Smith said the data this month “turned out to be disappointing.”
“This was weaker than expected as we had anticipated another slight lift in card spending for November,” Nguyen and Smith said.
The pair believed that despite falls in interest rates and easing inflationary pressures, households are “exercising constraint” amid rising job insecurity and slowing wage growth.
"Consumers have yet to fully translate improvements in optimism into increased retail spending, but we feel we are getting close to the inflexion point."
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
