Spring surge for retailers

Fairfax Media

SPRING BOUNCE: Retail sales figures bounced back strongly in August after taking a dip the month before

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Retail sales figures bounced back strongly in August after taking a dip the month before, figures out today from Statistics New Zealand show.

Total retail sales rose by $60 million, or 1.1 percent, on a seasonally adjusted basis. In July sales fell 0.5 per cent.

Excluding the volatile vehicle-related figures, core retail sales jumped 1.2 per cent in August, after falling 0.6 per cent in July.

The latest figures point to a general improving trend in the economic environment. Retailers have generally been doing it tough since 2007, with sales being badly knocked firstly by high interest rates and soaring fuel bills and later by the overall impact of the recession, which began at the start of 2008 and has only just officially ended.

SNZ said two-thirds of all industries showed increases in sales during August.

The biggest rise was reported by clothing and softgoods retailers, with a 6.5 per cent surge. SNZ pointed out that the mild August weather could have given an early impetus to sales of spring clothing. In May, clothing retailers got a strong lift in sales of warm clothing after that month heralded a bitter and early start to winter.

ASB economist Jane Turner suggested that Australian tourists hitting the ski slopes during what has been a good season could have helped boost the August sales.

"Nonetheless, the pick up over August does highlight the improved optimism on the consumer spending outlook," she said.

"Consumer confidence has picked up firmly over recent months. In addition, retail spending volumes should also be supported by the current surge in net migration. We do expect a slow recovery in consumer demand to continue over the next year."

Supermarket sales, which have constantly propped up sales figures in recent times, fell by $3 million, or 0.2 percent. This drop points possibly to some falling prices due to the rapid easing of inflation. Through 2007 and 2008 supermarket sales gained strongly as high levels of inflation fed into food and grocery prices.

Some rises in fuel prices during August saw the automotive fuel sector record a 1.9 percent increase in sales. However, the motor vehicle retail sector, after seeing some recovery from extremely depressed levels of activity in recent months, had another slump. Sales were down $7 million, or 1.4 percent.

- © Fairfax NZ News