In-store retail spending up in Auckland, but shops 'aren't out of the woods yet'
The move to alert level 3, step 2 in Auckland has boosted retail – but there’s a warning shops aren’t out of the woods yet.
The loosened restrictions in Tāmaki Makaurau led to an immediate increase in in-store spending, with the number of credit card transactions up 35 per cent over the first five days at step 2, the Kiwibank Household Spending Tracker report shows.
The value of the spend also rose 62 per cent.
In aggregate, the value of total credit card spend in Auckland is up 14 per cent.
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Department stores were the biggest winners from the change in restrictions, with the number of credit card transactions made in-store rising eight-fold.
Spending inside apparel stores also spiked, as well as in home improvement shops, with Mitre 10 reporting potting mix being the most popular purchase.
There was an increase in home renovation and hardware click-and-collect shopping, too.
But the report said some parts of the retail sector were still struggling.
Overall spending in Auckland is still down 2.2 per cent compared to pre-lockdown average as restrictions have dragged on.
But it’s a considerable improvement from being down 14 per cent while at level 3, step 1 the report said.
It said spending activity should increase again once Auckland moves to the traffic light system and the border opens on December 15.
Kiwibank economists have pencilled in a gross domestic product (GDP) rebound of around 8.5 per cent in the fourth quarter. But, with Auckland spending all of October in some form of lockdown, there was growing downside risk to the forecast, they said.
“While our spending data and several leading indicators suggest that underlying demand is solid, Covid is still calling the shots for the economy, near-term. So long as lockdowns are part of the playbook, large swings in economic activity are to be expected,” the report said.