February retail sales flat, Auckland hardest hit

Tuesday 14th April 2009

Times remained tough for retailers in February, especially in Auckland, with seasonally adjusted monthly sales up 0.20% compared with January 2009, when they slipped 1.20% from December.

While this was significantly better than the 0.3% decline predicted in Reuters market consensus figures, automotive indices were volatile, and the improvement partly reflected a petrol price hike.

Seasonally adjusted automobile sales fell 3.20%, but a sharp jump in petrol prices from around $1.32 a litre in January to $1.69 by the end of February pushed a 6.70% increase in automotive fuel sales.

Excluding the automotive component, February's seasonally adjusted retail sales were down 0.10%.

"It's more of the same. It's pretty feeble out there for retailers," said Mark Walton at the Bank of New Zealand's economic research department. "Sales are flat or drifting down. At least they're not plunging."

Hardest hit by comparison with the same month both one and two years' earlier was the Auckland region - the only part of the country to be showing lower total sales in Feburary 2009 compared with the same month two years earlier, at the height of the housing-fuelled boom.

However, sales trends are in decline for all regions, except Canterbury, reflecting a generally more positive picture in the South than the North Island. Retail sales since January 2008 have shown a 4.4% downward trend in the North Island, while in the South they have remained flat and recovered very slightly in the six months since September last year (0.10% upward trend).

The impact of closed wallets on summer holiday spending was marked, with recreational goods (down 4.90% from January) and accommodation (down 4.20%) the biggest fallers. Supermarket sales are holding up and spending on takeaway meals stayed in positive territory. Spending on bars and clubs, personal services, and clothing all showed sharp declines.

By Jonathan Underhill

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