December's buyers exhibit restraint

BY NICK CHURCHOUSE
Last updated 05:00 07/01/2010

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Economy

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Retail sales figures for December show shoppers were restrained in their holiday spending, while anecdotal evidence is suggesting only a slow return to better times this year.

Paymark data for December, comprising 75 per cent of all electronic card transactions, showed a modest 2.6 per cent improvement over 2008, excluding petrol.

Paymark spokesman Paul Whiston said the growth came late in the month, but traditional spending areas of hardware, DIY and camping and sporting outlets were lower than usual.

"But the feel-good sectors – cafes, jewellery and haircare – were up."

Retailworld Resourcing managing director Trish McLean said retailers were hiring again. Hardware and DIY stores had been hard hit in the past 18 months, but generally retail recruiting had picked up since November, she said.

While it was close to Christmas, the timing suggested it was more about hopes and planning for 2010.

The difference was that last year vacancies were being disestablished rather than filled, while now retailers were seeing sense in pulling people back into the business, she said. "There's either movement in their teams, or the workload is getting too big and they are starting to hire."

Mid to senior roles were starting to show up more often, largely because people were feeling more confident to step into the job market.

Finding qualified people was extremely hard and employers were paying people big money to stay in their jobs in the face of another offer. "That shows the talent is just not out there."

The optimism was good, but 2010 was still an unknown, Ms McLean said. "I'm feeling guarded, I'm not swinging off the rafters."

Retailers Association chief executive John Albertson said increased optimism, extra cash from tax breaks and the likelihood of "retail therapy" after a tough year had led to a forecast of 5 per cent growth for the Christmas period. The Paymark figures indicated closer to 1.5 per cent growth after inflation was accounted for, he said.

"That's a little disappointing. You are talking about growth over last year and last year was a pretty flat year. It's positive but only just."

With the dire consumer sentiment behind them, retailers would do better this year, Mr Albertson said, with growth predicted at 2 to 3 per cent. But families were wary of debt, credit card debt in particular, and that would temper spending.

Smart retailers would be planning modestly for the coming year, and any more closures in the sector were likely to be fringe independent retailers. "They perhaps don't have the skills to be a very good retailer in tough times."

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Most surviving outlets would be largely in control of their finances by now, and had to keep a tight rein on them in 2010.

- The Dominion Post

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