Growth in June retail sales

By Phil Boeyen, ShareChat Business News Editor

Wednesday 8th August 2001

People are buying more according to the latest retail sales figures.

Statistics New Zealand says retail sales for the quarter ended June grew 2.3%, with sales in the month of June rising 1.2% on the previous month.

Seasonally adjusted sales for the core-retailing group, excluding the motor vehicle retailing and motor vehicle services stores, increased 2% compared with the March 2001 quarter.

The figures show that after adjusting for price changes, volumes for the core-retailing group increased 1.3% for the quarter, with prices rising 0.7%.

"This is in contrast to the March 2001 quarter when price increases dominated the 1.9% increase," statistics New Zealand says.

Taken over a year the latest figures show the trend in retail sales grew 6.9% for the year ended June, although with the effects of increased prices removed the figure drops to 2.2%.

Food retailing made the largest contribution in dollar value to the overall $264 million increase for the latest quarter, followed by the motor vehicle services, the motor vehicle retailing and department stores.

The motor vehicles services category is dominated by fuel retailing, and showed an increase of 4.1% for the three months, mostly from price increases.

HSBC economist Grant Fitzner says the new retail statistics show consumer spending appears to be on firmer footing and should help the New Zealand dollar move higher in the short term.

He says they also suggest interest rates will stay the same this month.

"While strong retail and wage figures don't completely rule out a rate cut at the 15 August MPS, they have pared back the chances to about one in four. A solid rise in Q2 employment tomorrow morning could be the final nail in the coffin of an imminent RBNZ rate cut."

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