Sluggish start to the year for retail

Kiwi shoppers kept a tight rein on their spending during January, with latest figures showing annual growth was the slowest it has been in five months.

Paymark said nationwide annual growth was 3.2 per cent for the month, below the 3.9 per cent annual growth rate reported in December.

The weaker figures appeared to be a combination of wet weather and a general economic step-back, the company said.

January 23 was the wildest day weather-wise, and had the biggest impact on sales, with Kiwis spending 1.9 per cent or $5 million less than on the same trading day in 2010.

Paymark Head of Sales and Marketing, Paul Whiston, said while the weather had played a part, other factors, including the level of demand in the economy, had contributed to sluggish January sales.

In January, spending on items that fall outside of supermarkets and petrol was 2.3 per cent higher than during January 2010, or up 3.6 per cent in terms of the number of transactions.

The change in the transaction growth rate - a measure not directly impacted by the GST rate increase - showed the mixed pattern of spending habits in recent months.

"In 2010, the annual growth in the number of transactions (excluding petrol stations and supermarkets) was running at 3.8 per cent, until the last quarter, when it jumped to 4.6 per cent, hinting at an improving trend.

The fact that the number of discretionary transactions in January has returned to pre-October growth rates tells us that Kiwis are still being cautious, he said.

Takeaways, which saw a big increase in late December, have had another spending upsurge in January with a year-on-year increase of 25 per cent.

Hardware was also up 5 per cent for the month.

Sectors experiencing a decline in January included clothing (3 per cent growth year-on-year), which was down from 7 per cent growth in November, as well as accommodation, slow at 2 per cent growth year-on-year.

Regionally, South Canterbury continues a strong run, with year-on-year growth of 5.7 per cent. Taranaki and Taupo also posted positive growth, at 5.4 per cent.

The West Coast and Marlborough reported annual growth decreases of -3 per cent and -5 per cent respectively.

- NZ HERALD ONLINE