What Kiwis are spending up on in the week before Christmas

Wet weather in Auckland city as people go about their Christmas shopping in Commercial Bay, downtown Auckland. Photo / Alex Burton

Retail spending continues to surge leading up to Christmas.

Worldline New Zealand released data today showing that electronic retail spending last week was at $881 million, up 1.9 per cent on the same week last year and 14.6 per cent from spending in 2019.

Spending for the final week before Christmas started strong with spending on December 18 reaching 12.1 per cent higher than last year.

Worldline NZ chief sales officer Bruce Proffit said consumer spending is likely to increase more in the days ahead.

Proffit said, “Spending does normally increase week-to-week in the run-up to Christmas, and while we saw an 8.3 per cent jump last week, this was around typical levels.”

He said large rises were seen at recreational goods retailers up 28.7 per cent and clothing and footwear shops up 21.9 per cent in spending.

“All this suggests spending is on track to jump around 40 per cent this week, as last-minute gift purchases and stocking up on Christmas food climbs to its usual frenzied peak on Friday and Saturday.”

Worldline showed spending in hospitality “remained strong” in the week ending December 17, adding to $254m across New Zealand, with spending on Saturday December 17 at $46m.

Overall, electronic hospitality spending was up 20.3 per cent from the same week last year, rising 4.2 per cent from 2019.

“While spending amongst the hospitality sector is expected to remain at high levels in the last few days ahead of Christmas, it is likely that last Saturday marked the peak day this year for wining and dining,” Proffit said.

Regional hospitality spending for the week was highest in the West Coast, up 46.8 per cent from the same week last year coming in at $1.9m.

Regional retail spending was highest in Marlborough, up 10.6 per cent from last year, while West Coast (up 10.5 per cent) and Otago (up 8.7 per cent) followed.

Spending dropped for the same period in Auckland and Northland, Gisborne, all down 0.8 per cent and Bay of Plenty (down 2.5 per cent).

Infometrics principal economist Brad Olsen said Worldline’s data accounts for roughly 70 per cent of total transaction volume across the country.

Worldline highlights the data is for total underlying spend, which excludes large clients moving to or from Worldline.

Olsen said this means big retailers moving from one payment system to another are excluded from the data.

He said the jump in spending from 2019 to this year is “almost purely” due to steep inflation in recent years.

“Worldline reported that core retail excluding hospitality for the week to December 17 rose 15.6 per cent, and that would broadly be in line with the level of inflation since 2019.”

He said the number of items purchased is likely to have remained static or gone down this year compared with other years, and any increased spending is due to inflation.

“Relative to 2019, you’ve got slower growth in Auckland and Wellington. Those percentage gains are smaller than the national average, which suggests a bit of a lull coming through in the major metro areas.”