Winter grey casts a pall over spending

Last updated 12:58 16/07/2014
Therese Phillips
MARTIN DE RUYTER/FAIRFAX NZ
DISCOUNTS: Winter sale signs have sprouted in Nelson to entice spending after a sluggish start to the season.

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Nelson is one of the worst performing regions in spending, latest Eftpos data shows.

Spending across the region increased just 1.1 per cent year-on-year to June, compared to 5.9 per cent nationally.

Other South Island regions have enjoyed healthy growth, with spending in Otago up 6.8 per cent and Southland 8.5 per cent.

Only South Canterbury is worse than Nelson, with a 0.9 per cent rise.

While winter is traditionally a quiet time in Nelson, last month's spending is a sharp decline from the same time last year when the region had 5.7 per cent spending growth.

Nelson City Council has already moved to stimulate spending in the city with its introduction of a 12-week free parking trial, after pressure from worried city businesses.

City promotions group Uniquely Nelson manager Cathy Madigan put the region's low spending down to a late winter and expects July's figures will be better.

"We can look forward to a bumper July - we've free parking, school holidays and hospitality rates are up because of Light Nelson.

"We knew June was soft, I'm a bit disappointed to find it that soft."

The national growth rate had been pushed up by economic growth in Canterbury and Auckland, while some of the provinces had plateaued a little, she said.

"I don't think our rate is anything to get unduly worried about," she said.

The late winter meant people could now go out and buy their winter essentials.

Some shop sales are offering as much as 80 per cent discounts.

Madigan said it was normal sale time which should encourage people to spend.

Paymark, which processes more than 75 per cent of all electronic transactions, said nationally, spending on its network in the year to June was up 7.3 per cent, more than double the growth rate of each of the last two years.

Hardware stores were the big winners, with spending increasing 37.4 per cent, followed by cafes and restaurants 21.7 per cent and the automotive sector increasing 16.3 per cent largely due to rising petrol prices.

Paymark head of customer relations Mark Spicer said a strong housing market and the Canterbury rebuild were driving spending at hardware stores.

The mild winter had hit clothing retailers, resulting in a 5.3 per cent decline in sales value in the year to June 30.

Spending on appliances fell 6.5 per cent while department stores rung up 4 per cent less in takings.

Spicer said a mild start to winter meant people were delaying the purchase of winter goods.

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"In the most recent month the growth rate has slowed but a late start to winter is thought to be a key factor," the Paymark report said.

Statistics NZ figures support this with sales using electronic cards showing retail spending was unchanged in June, after a 1.2 per cent jump in May.

- The Nelson Mail

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