Autumn spending slows less than usual

Retail spending slowed down in the lead up to winter but not as much as usual for this time of year, according to Paymark figures.

Electronic card spending through the Paymark electronic payments network increased 1.5 per cent and 1.4 per cent respectively in April and May, after taking into account seasonal patterns.

This did not translate into a large sales surge for most retailers as total spending actually declined between March and April.

Compared to the usual pattern heading into winter, the spending slowdown was not too bad.

Of the four spending categories - housing, hospitality, discretionary and non-discretionary - the most notable upturn was in spending on the house.

Merchants associated with housing saw double-digit annual growth in May, a turnaround from declining sales in 2011. Seasonally adjusted spending hit growth rates of 4.2 per cent and 1.8 per cent in April and May.

Figures also hinted at improved conditions in hospitality.

Although annual growth remained low, mostly due to a post-RWC slump, growth recently months was positive, especially among restaurants and cafes rather than hotels.

This was consistent with improved domestic conditions but a declining trend in tourist arrivals.

Negative monthly growth in February and March turned positive in April and May among merchants linked to discretionary and non-discretionary expenditure.

Discretionary merchants included the likes of travel companies, gyms, dentists and hairdressers. Spending increased at automotive repair firms and dentists but not so at travel companies.

Non-discretionary spending covered merchants like supermarkets, meat and fish vendors, and power companies. Paymark said it had moderated its spending growth at food outlets, partly due to flat-to-lower food prices this year but also due to only a small increase in transactions.

Paymark processes about 75 per cent of electronic transactions in the country.

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