The New Zealand Institute of Economic Research Quarterly Survey of Business Opinion, released yesterday, said retailers' "very strong expectations for the December quarter, which may have been related to the Rugby World Cup, did not materialise".
ANZ senior economist Sharon Zollner said the electronic cards data was weaker than both the market's and the bank's expectations.
A post-Rugby World Cup hangover was expected to continue weakening retail trade activity during the early part of this year, Zollner said.
Households remained cautious about spending, she said, and overseas economic developments were likely to add to that caution, as shown by falls in consumer confidence.
"The consumer appears to be no threat to the Reserve Bank's plan to keep the OCR at record lows for a considerable period."
Goldman Sachs economist Philip Borkin said stronger household consumption would require a drop in the savings rate, which appeared unlikely in the current environment.
"In fact, we see it as more likely that the household savings rate continues to rise," Borkin said.
New Zealand Retailers Association chief executive John Albertson said the more than 6 per cent increase in year-on-year total card spending was a reasonably good result.
Statistics NZ industry and labour statistics manager Louise Holmes-Oliver said the number of retail transactions exceeded 100 million for the first time in December.
"This milestone was reached despite flooding in Tasman and earthquakes in Canterbury during the Christmas shopping period."
Core retail spending, which excludes motor vehicle-related industries, fell 0.1 per cent in December.
"Of the core retail industries, consumables and durables both had rises, while the apparel and hospitality industries both had small falls in seasonally adjusted sales," Statistics NZ said.
ASB economist Christina Leung said it was encouraging that spending on durables - items like appliances - was continuing, which showed households were feeling confident enough to make big-ticket purchases.
"We expect a continued recovery in underlying retail spending over 2012, although this will likely remain gradual in light of the continued high level of household debt," Leung said.
Meanwhile, the NZIER said its Survey of Business Opinion showed a moderation in economic activity during the December 2011 quarter.
Firms' trading activity eased from 1 per cent expansion in the previous quarter to negative 4 per cent in December, seasonally adjusted.
"This is consistent with annual economic growth of around 1.6 per cent."
The institute said that while services and retail grew during the December quarter, manufacturing was flat and construction activity lessened.
"Canterbury is rebounding from the earthquake disruption, but the rest of the country is slowing."
SPENDING
- Total electronic card spending reached $6.6 billion in December 2011, up from $6.1 billion in December 2010.
- However, when adjusted for seasonal effects such as Christmas spending the total value of transactions fell 0.2 per cent in November.
- Total number of transactions exceeded 100,000 for the first time in December.
- Fuel retailing fell 0.1 per cent in December, following strong rises in each of the preceding months.
Source: Statistics New Zealand
