KEY POINTS:
Retail sales continued to wilt in January with what little growth there was largely concentrated in the supermarket sector, where turnover is underpinned by food price inflation.
Adjusted for seasonal variations, sales rose 0.3 per cent from December levels, Statistics New Zealand said.
In unadjusted terms, sales were 6.3 per cent higher than in January 2007 but that was boosted by a 30 per cent rise in sales of petrol and diesel.
Core sales, which exclude the automotive sector, were 4.6 per cent ahead of a year earlier, which would be around 1.4 per cent in real terms.
Most of the increase was in the supermarket and grocery store sector, where sales were up 2.1 per cent on December, seasonally adjusted. Much of that is explained by a 0.8 per cent rise in food prices in January.
The next biggest increase in dollar terms was among bars and clubs, up 8.2 per cent. Takeaways on the other hand suffered a 6.1 per cent fall.
Goldman Sachs JBWere economist Shamubeel Eaqub said much of the increase in retail spending over recent months had been concentrated in necessities, such as food and energy, while discretionary spending had been moderating.
"With the housing market continuing to slow we expect to see further weakness in retail spending. Indeed consumer confidence data already reflects this."
