Retail spending fails to post big score

Rugby World Cup fans may be more likely to carry and spend cash, which could have skewed figures, but anecdotal evidence indicates September retail spending has been modest. Photo / Janna Dixon

Retail spending continued to flatten out last month, despite the Rugby World Cup.

Electronic card transactions data for September, which captures 60 per cent of retail spending, recorded a rise of 0.4 per cent on August for the retail sector as a whole, seasonally adjusted, and 0.6 per cent rise when the automotive sector is excluded.

For the September quarter as a whole retail sales (at least those paid for by credit, debit or charge cards) were up just 0.5 per cent on the June quarter, which was 2.2 per cent up on the March quarter.

Compared with August the largest increase was in automotive fuels, up 2.9 per cent, the largest increase since October last year when fuel excise rose 3c a litre and the GST rate increased to 15 per cent, Statistics New Zealand said.

The hospitality sector recorded a 1.3 per cent increase for the month, consumables (which includes food) 0.6 per cent and consumer durables 0.9 per cent.

"These figures will not fully reflect the economic benefit of international visitor spending as they do not include cash sales as well as pre-paid spending on accommodation and ticket sales for example," Goldman Sachs economist Philip Borkin said.

However, it appeared consistent with anecdotes of spending failing to meet expectations.

Borkin noted that Paymark had reported spending on foreign cards last month was up 29 per cent on September last year.

"But the soft headline figures [imply] that spending by locals has slowed or even fallen." he said.

"Whether this weak domestic spending ... picks up at the conclusion of the tournament, will be key to watch."

Infometrics economist Matt Nolan said cash spending - not captured by the cards data - might have been a higher proportion of overall spending during the cup.

"As a result, we doubt overall retail activity was as weak as the electronic card sales figures suggest. Even so, these numbers point to a cautious household sector that will be unwilling to significantly increase spending until the domestic and global economies are back on track."