KEY POINTS:
Retail sales rose by a seasonally adjusted 0.3 per cent in January, Statistics New Zealand (SNZ) said today.
The figure was right on the median expectation in a Reuters poll of economists, and followed at 0.1 per cent increase in December.
Excluding vehicle-related industries, the retail figure was
also an increase of 0.3 per cent, against expectations of a 0.1 per cent decline.
SNZ said the increase in sales for the month was largely due to a 2.1 per cent, or $25 million, increase in supermarket and grocery store sales.
Economists saw the data as soft, pointing out that higher food prices looked to be a key factor behind the increase.
Vehicle fuel sales rose by 1.1 per cent, or $7m, the fifth consecutive monthly increase, reflecting continued high prices.
Compared with January 2007 actual vehicle fuel sales in January 2008 were up 30.6 per cent, or $143m, SNZ said.
The vehicle fuel sales trend had been rising since December 2006, up 29.2 per cent since then.
It had been rising at a "very high rate" of 3.5 per cent a month since last July, compared to an average rate of 0.6 per cent a month since the series started in 1995.
The other industry to record a sizeable seasonally adjusted sales increase was bars and clubs, up 8.1 per cent, or $8m, in January 2008 from December.
The largest decreases were in appliances, takeaway foods and department stores, each down $6m.
In all, 15 of the 24 retail industries covered had falling sales, but none of the other sales decreases were greater than $4m, SNZ said.
UBS senior economist Robin Clements said the key thing was the trend in core retailing, which excludes vehicle-related industries, which was "stumbling along" at just above zero, with the annual rate of 2.8 per cent the lowest since late 1998.
In terms of the retail sales indicator, demand had basically stalled late last year and was "just very, very soft".
ANZ economist Khoon Goh said that having most of the increase coming from one store type - supermarket and grocery stores - was a reflection of higher food prices.
Excluding that category, total retail sales would have been down 0.2 per cent, which was a better reflection of underlying consumer demand.
SNZ said the total retail sales trend had been increasing since May 1998. It had recently returned to an average rate of increase of 0.5 per cent a month, following a period of slower growth between April and August.
The current rate of increase in the total retail sales trend had been bolstered by the strong rise in fuel prices. If fuel prices were excluded, the trend would be rising at a slower pace, SNZ said.
The core retailing trend, excluding the four vehicle-related industries, had flattened since April. The last time the core trend had remained flat for a similar amount of time was between mid-1997 and mid-1998.
In the year to January, actual retail sales increased 6.3 per cent.
- NZPA
