By SIMON HENDERY
Retail sales for October were up 6 per cent on last year, but analysts and retailers remain subdued about prospects for Christmas.
Seasonally adjusted, sales were almost unchanged for the month, down just 0.1 per cent from September at $3.69 billion, said Statistics New Zealand.
Of the 15 store types surveyed, eight recorded higher seasonally adjusted sales in October.
The largest increases were posted by cafes, restaurants and takeaway businesses, up 2.3 per cent.
Car retailing was up 0.7 per cent.
Clothing and softgoods recorded the largest fall, down 6.8 per cent, followed by footwear store sales, down 4.9 per cent.
Senior Deutsche Bank economist Darren Gibbs said that although consumer confidence was improving, negative factors were having an effect on retail sales.
The depressed housing market and rising consumer prices were likely to keep growth in retail volumes relatively subdued over the foreseeable future, he said.
Bank of New Zealand economists Geoff Mason and Craig Ebert said the October figures were likely to have been boosted by strong tourism spending and the timing of the school holidays, and the underlying picture was weak.
"Poor consumer confidence down sharply from earlier in the year is starting to feed through and adds to the negative effects of falling house prices and muted wage growth."
The BNZ said its own credit card information pointed to a further spending fall in November.
"Households are likely to take little solace from [today's] monetary policy statement, where the Reserve Bank is widely tipped to maintain a tightening interest rate bias."
Retailers also appear to be taking a cautious approach in the lead up to Christmas.
At its annual meeting two weeks ago, The Warehouse warned shareholders that it could not predict how Christmas sales would go this year.
Yesterday, Foodland Associated, the Perth-based parent company of New Zealand's Farmers and Deka chains, said uncertainty about Christmas sales made it inappropriate for the company to predict its results over the next three months.
Jingle bells muted for most stores
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