Retail sales showing no sign of tiring

By NZPA

Tuesday 21st January 2003

Retail trade still shows no sign of slowing, analysts said after new data out today.

Figures from Statistics New Zealand today show seasonally adjusted retail sales for November rose 0.5 percent, compared to the previous month.

Core retailing, which excludes vehicle sales and services, increased by the same amount.

November's figures were exactly to analysts' expectations, although the year on year figure was a little lower than forecast.

Sales were 5.7 percent higher than November 2001, a little lower than analysts' expectations of 6.9 percent.

In October, retail sales increased by a revised 0.7 percent and were 8.7 percent higher on a year on year basis.

BNZ economist Craig Ebert said it was a little early to form a view on whether retail sales were gradually beginning to slow.

On the face of it, it seemed like "another solid result, and all indications are that December was another good month".

As it was, the fourth quarter retail figures were shaping up to be robust, not quite as strong as the 1.1 percent in Q3 but "toward the 1 percent mark".

Deutsche Bank senior economist Darren Gibbs believed that growth in nominal (non-inflation adjusted) spending would ease, "reflecting the combined influence of a declining inflation profile and slower growth in real spending, with the rising New Zealand dollar playing a key role".

He expected retail spending in the regions to weaken as the lagged effect of lower export returns caught up with them.

Overall, nine out of 15 store categories recorded increased sales, with falls in footwear, recreational goods, appliance retailing, motor vehicle services and "other stores".

The biggest contributors to November's rise in dollar terms were motor vehicle and department store sales, which rose a seasonally adjusted 1.7 percent and 3.3 percent respectively.

But in percentage terms, department stores and furniture sales were the leaders, with furniture up 3.1 percent.

Appliances, a key indicator on the health of household spending, fell 1.1 percent but Mr Gibbs said that could be because of a fall in prices rather than demand.

Statistics NZ noted that the trend for department store sales had been increasing since October 2001. Car sales had been more volatile, with the trend recording its third consecutive loss despite November's rise.

Regionally, the provinces dipped into their wallets in something of a pre-Christmas spend-up.

The biggest spenders were the rest of the South Island (minus Canterbury), where sales increased 1.4 percent on the previous month.

Second was the rest of the North Island (minus Auckland, Wellington and the Waikato), where sales bounced 1.3 percent.

Actual sales during November showed New Zealanders spent $4.3 billion.

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