All retail spending categories were lower. Motor vehicles (excluding fuel) was down 2.2 per cent ($4.5m); durables down 0.3 per cent ($5.1m) and consumables fell 0.2 per cent ($6.3m).
Core retail spending, which excludes fuel and motor vehicles, decreased 0.6 per cent ($36m).
The non-retail (excluding services) category increased by 2.1 per cent or $47m in March compared with February. This includes spending on medical and other healthcare, travel and tour arrangement, postal and courier delivery, and other non-retail industries.
The services category — which includes repair and maintenance, personal care and funeral — was down 0.9 per cent ($3.3m).
In real terms, cardholders made 168 million transactions across all industries in March with $9.2 billion spent.
For the March quarter, spending in retail industries increased 0.1 per cent, or $27m, compared with the December 2023 quarter.
This was led by durables, up 1.1 per cent ($53m). Consumables was the only other category to increase, up 0.6 per cent ($48m).
Spending on fuel fell 1.7 per cent ($28m); motor vehicles declined 1.1 per cent ($6.8m) and apparel fell 0.2 per cent ($1.6m).
Across the core retail industries, spending increased 0.4 per cent ($67m).
Gibbs said the results suggest that the retail sector will continue to weigh negatively on GDP growth during the quarter.
“We expect households to remain cautious with regards to their spending over the coming months, consistent with still very weak levels of consumer confidence.
“That’s likely to be compounded by a further softening of the labour market over coming months as businesses right-size their work force to reflect a subdued economic outlook, especially as interest rates are likely to remain elevated for longer than many had anticipated at the beginning of this year.”
A swath of spending data over the past week shows the extent to which Kiwis have pulled back on their discretionary spending.
Yesterday, Kiwibank said electronic card spend contracted 7 per cent in the March quarter.
But it was the volume of spend that reveals a bleaker truth, it said.
“While the total dollars spent grew over the quarter, the total number of transactions shrank — down 4 per cent,” the report said. “With high inflation and rising interest rates, Kiwi households are clearly reluctant to spend. And we will likely see more of the same in the coming quarters. We’re [still] spending more to [still] get less.”
This week, ANZ’s merchant and card spending data for March showed annual growth in total spending was 2.5 per cent, lower than February’s annual figure of 3.5 per cent.
On a monthly basis, spending was flat, growing 0.3 per cent in March — the same as that recorded in February.
Clothing retailers were particularly hit hard with annual growth down 1.7 per cent.
Annual growth in restaurants and bar spending fell 3 per cent.
“Spending across a range of categories that can be considered discretionary is lower compared to a year ago, even though prices will have gone up a lot over that period. That suggests turnover is well down,” ANZ chief economist Sharon Zollner said.
Meanwhile, Easter spending was weak, according to figures from payments network Worldline.
Consumer spending through core retail merchants (excluding hospitality) reached $3.05 billion in March, down 0.2 per cent compared with March 2023.
Spending over the five Easter trading days (Thursday to Easter Monday) was up 2.5 per cent compared with the same period last year.
This only reflected the softness in the economy, Westpac senior economist Satish Ranchhod said.
With the population growing by 2.8 per cent and prices increasing 4 per cent over the past year, “an increase in spending of only 2.5 per cent actually points to some pretty soft spending appetites out there”, Ranchhod said.
“We have been seeing spending appetites and economic activity generally crawling through the early part of this year.”
