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Coronavirus infects spending habits

Spending through the Paymark network reveals mixed spending patterns resulting from the coronavirus during January and February.

Spending with China-issued credit cards was down 39.3 per cent in February from a year earlier but had been up 19.8 per cent in January.

Total foreign-issued credit card spending was up 4.1 per cent in January and 12.7 per cent in February, with the high February figure in part due to the leap year effect.

Spending with China-issued cards had been generally down over 2019 but there was a sharp increase in January and an even sharper fall in February, both changes occurring across a wide range of merchant sectors. Spending at chemists with China-issued cards jumped 94.1 per cent in January from a year earlier and was still up 4.4 per cent in February.

Spending with other foreign-issued credit cards had been generally rising through 2019 and accelerated in January and February. This pattern was particularly noticeable amongst cards issued in the US.

In total $348 million was spent in February through Paymark with credit cards that could be identified as foreign-issued, up 12.7 per cent on a year earlier.

Across all foreign-issued cards, spending was down in February within Otago (-2.6 per cent), Southland (-2.8 per cent) and West Coast (-10.2 per cent). Foreign-issued card spending was down in these regions amongst accommodation merchants, as was the case also in Canterbury and South Canterbury. Foreign-card spending had already been down declining in West Coast during recent months.

Otherwise spending with all cards – credit and debit, local and foreign – through Paymark was $5194 million in February, up 6.7 per cent in underlying terms on February 2019, again a higher rate than of late due to the leap year effect, giving us an extra day of spending. The annual underlying growth rate of the previous three months had averaged 4.0 per cent. Growth was slowest in Auckland/Northland (+4.1 per cent).

There were some noticeable spikes in annual growth rates during some days in February. There was the usual holiday effects around Waitangi Day and the usual romance effects around Valentine’s Day.

However there was also a spike in total card spending at supermarkets and chemists on Saturday,  February 29, relative to Saturday, March 2, 2019. This spending spike was strongest in Auckland/Northland, with supermarkets up +40.2 per cent and chemists sharply up by +75.5 per cent.

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