Retail boost as card spending rises

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The retail sector was given cause for optimism this morning with the release of data showing electronic card transactions rose by a stronger-than-expected 1.0 per cent in October, making for a 5.7 per cent gain year-on-year.

Statistics NZ said seasonally adjusted transactions were 1.5 per cent after a zero per cent outcome in the previous month, and up 5.9 per cent year-on-year.

Core retail transaction data, which strips out spending on fuel and vehicle related items, rose by 1.1 percent, for a 6.0 per cent year-on-year gain.

Westpac said the data suggested that September's weak outturn for electronic card spending may have been an aberration.

"Spending bounced back strongly in October, with particularly large gains in the categories which saw surprising weakness last month," Westpac said in a commentary.
Comments from cards processor Paymark released earlier pointed to particularly big gains in spending on building supplies, hardware, appliances and furniture.

ASB Bank said it expected to see continued moderate growth in underlying household spending. "While down over recent months, consumer confidence remains high and, supported by the improvement in the labour market, this combination should encourage further moderate growth in household spending," the bank said in a commentary.

Statistics NZ (SNZ) said spending rose in all six retail industries during October, the first time this has occurred since May this year.

The three largest retail increases in October 2014 were in durables, up $23 million (2.1 percent) fuel, up $16 million (2.2 percent), consumables, up $15 million (0.9 percent).

Trends for the total, retail, and core retail series have all generally been rising since these series began in October 2002, SNZ said.

In unadjusted terms, card-holders made 124 million transactions across all industries in October, with an average value of $51. The total amount spent across all transactions was $6.4 billion.