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A big boost in retail spending in July is a welcome bright spot for the struggling sector, says Retail NZ, the peak industry body representing retailers in Aotearoa.
Stats NZ’s July Electronic Card Transactions data shows a 3.5% increase in actual core retail spending compared with July last year.
It follows a flat June, where the actual core retail spending rose just 0.4% year-on-year.
“The 3.5% lift in spending in July is really encouraging for retailers, with the winter months generally slower for the sector,” says Retail NZ’s Advocacy, Advice & Communications Manager, Denise Garland.
“Falling fuel prices meant households had a little bit extra in their pockets, and we can see that Kiwis took that opportunity to treat themselves,” says Denise.
“Both durables (4%) and hospitality (4.5%) experienced significant rises in spending activity, which are sectors that tend to see an uptick when consumer confidence is on the up. Even apparel had a boost of 2.5%, the biggest year-on-year increase in at least two years, and it’s also the biggest bump in spending from June to July since 2020.”
The rise in hospitality spending in particular shows just how important events are for retail.
“The men’s FIFA Football World Cup looks to have encouraged people out into bars and restaurants right around the motu. Events are hugely important to retail, because extra foot traffic in our town and city centres also means more people are out browsing in our high streets.”
It’s not yet clear, however, whether this is a temporary spike thanks to a unique combination of circumstances, or if it is the sign of a broader, positive shift in consumer confidence.
“July was unique in that not only was there a major international sporting event for the first half of the month, but there was also a public holiday – Matariki – and there were five Fridays, which are typically the weekday where we see the biggest spend in retail,” says Denise.
Despite the positive numbers, retailers will still be waiting to see whether those factors just contributed to a brief lift in retail spending, or whether New Zealanders are starting to feel some economic optimism.
