Sales suggest 'slow, grinding recovery'

Retail sales rose in April as buyers returned to car yards.

But core retail sales, which exclude the volatile and lately depressed automotive sector, declined 0.1 per cent to be up just 2 per cent on where they were a year ago.

The rise in total sales in April was 0.5 per cent, seasonally adjusted, the strongest increase since June last year.

It was boosted by a 3.5 per cent increase in vehicle sales to the highest level seen this year, but still 20 per cent down on April last year. Fuel sales were also up, 1.1 per cent.

Other big ticket items continued to struggle, however. Furniture and floor covering sales were off 4.7 per cent, while appliance sales clawed back only a fifth of March's 4.4 per cent decline.

In all, 14 of the 24 store types into which Statistics New Zealand divides retailers recorded increased sales compared with the month before.

Early indications, in the form of electronic card transactions, suggest sales in May were also on the improve.

"Taken together today's retail sales data for April and Wednesday's card data for May suggest a slow, grinding recovery in the retail sector," Goldman Sachs JBWere economist Bernard Doyle said.

"This is certainly not something the retail sector will be getting particularly excited about. Having said that, at least the deep declines in real spending activity look to be coming to an end."

Deutsche Bank chief economist Darren Gibbs thinks retail in the June quarter will rise in nominal terms for the first time in five quarters.