Shoppers put brakes on all but fuel
Consumers revved up card spending as petrol prices hit record highs last month.
But the pace of retail spending growth is more Sunday drive than race-car rally, ANZ says.
Total card spending in retail rose a stronger than expected 3 per cent last month on July to $4.27 billion, according to seasonally adjusted Statistics New Zealand figures.
Fuel retailing was a major contributor, up 11 per cent or $67m to $689 million. The price of 91-octane fuel hit just under $2.23 a litre last month, just over the previous record in May last year.
Excluding fuel and vehicle-related purchases, retail card spending rose 1 per cent to $3.5b, with all four categories recording increases.
ANZ senior economist Sharon Zollner said it was surprising fuel sales had not dropped off as prices rose, but overall the result was little more than a rebound from a weak July as earlier forecast.
Monthly retail data was volatile but the underlying growth trend was one of modest respectability.
Total retail card spending was increasing by 3.6 per cent per annum, while core retail card spending - excluding car-related sales - was growing by 3.1 per cent a year, based on card spending for the three months ending August year on year.
"That's probably the best New Zealand can manage at the moment, given consumers have got to pay back debt," Zollner said.
Of the core retail categories, hospitality recorded the biggest card spending boost -up 2 per cent or $13m to $629m. Card spending on durables rose only 0.6 per cent or $7m to $1b.
Paul Hardings, director of Hardings Handcrafted Furniture - which has three stores in Wellington and one in Palmerston North - said consumers remained unwilling to spend outside sales.
"We're having to work hard to make sure people get real value for money, otherwise they don't want to know you."
Zollner said the increase in durables spending reinforced consumer confidence was "holding up reasonably well".
"It's not like the good old days . . . [but] it does appear that people have noticed that house prices are doing OK, the incomes they earn are as well, the labour market hasn't fallen over and the world hasn't ended."
- Taranaki Daily News
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