Slip in sales reflects uncertainty

By Kiri Gillespie, Teuila Fuatai


A decline in sales during winter, compared to last year, has not been felt by some local retailers.

Statistics New Zealand figures released to the Bay of Plenty Times show total retail sales fell slightly by 0.4 per cent between the June and September quarters in the region.

A year-on-year comparison from the Quarterly Retail Trade Survey showed a similar decline of 0.3 per cent, between the September 2012 and 2011 quarters.

Tauranga Chamber of Commerce chief executive Max Mason said there was a level of uncertainty in the national and international economy "resulting in people not being confident enough in opening their wallets".

Retailers were hoping for an improvement over the summer.

The Western Bay was also still suffering the effects of the Rena disaster and PSA disease, he said.

However, summer was a great time in the Western Bay, Mr Mason said.

"I do know the tourism and accommodation providers are reporting good things for the future - that's creating a lot of optimism.

"Tourism is a $450 million sector in Tauranga, so if that's going well it's very positive for the rest of the community."

Nationally, seasonally-adjusted retail sales dipped 0.8 per cent since the June quarter.

This was led by New Zealand's three largest retail industries: Supermarket and grocery sales dipped 1.6 per cent, motor-vehicles and parts sales dropped 1.8 per cent and fuel retailing was down 1.9 per cent.

However, Shane Loomb, from IQ Toys, said this year's September quarter had been "pretty solid".

"We are seeing double digit sales growth on last year. I think this reflects the switch of buyers to online for the greater variety and also better prices," he said.

IQ Toys is an online retailer based in Mount Maunganui.

"Throughout the year we have also consistently added to our product range, which has also had a positive impact. Recent sales have been particularly strong.

"We are currently employing 25 people but may need 10 to 15 more in December."

Cabbages and Kings store manager Val Awld, who has worked at the store since it opened 20 years ago, said she had not noticed any decline in shoppers compared to last year. Ms Awld said there had been flatter periods during winter, but they had not really struggled.

"It has been felt in the past through the depths of winter but no, we are ticking along nicely," she said.

"I would think that's probably because we are a little bit more established. Things have been going along quite well. We just employed another full-time staff member to keep us going along."

Business NZ chief executive Phil O'Reilly said the decline was relatively minor.

"It's not bad, especially as the New Zealand economy faces really significant headwinds."

The weak performance of the manufacturing sector combined with the preference for many "mums and dads" to pay off debt at the moment could have caused a much larger downturn, he said.

"The fact that you've seen really quite a moderate downturn in retail is actually quite an impressive performance."

A strong September month for the service industry may have offset the drop in sales, Mr O'Reilly suggested.

Christmas shoppers were also expected to boost sales in the coming months, he said.

Statistics NZ industry and labour statistics manager Blair Cardno said shoppers spent less in more than half of retail industries during the September quarter.

"The only industry we saw them spending significantly more in was hardware, building and garden supplies, which was lifted by higher sales in the Canterbury region."

Sales volumes in this industry rose 4.2 per cent.

While retail sales were down from the growth period of 2011, total sales were up during the last quarter year-on-year.

"Retail sales volumes remain 2.6 per cent higher than a year ago, when the Rugby World Cup was on," ASB economist Daniel Smith said. "We expect moderate growth in spending to continue." He said the decline in supermarket sales would ease in the coming months.

"Other sectors were patchy, but we see no fundamental reason for the weakness in supermarket sales - the prime driver of the weak overall result - to continue in coming quarters."


Total value of retail sales Western Bay of Plenty district

September 2012 quarter: $689.3m

September 2011 quarter: $691.5m

Down 0.3 per cent

- Statistics NZ

- BAY OF PLENTY TIMES

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n3 at 20 Apr 2014 12:46:47 Processing Time: 479ms