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Current as of 30/09/16 05:59AM NZST
Property editor of the NZ Herald

Kiwis splash cash on December mall trips

Mall visitors spent a lot of their money on movies, telecommunications and travel last year. Photo / Dean Purcell.
Mall visitors spent a lot of their money on movies, telecommunications and travel last year. Photo / Dean Purcell.

Kiwis splashed their cash at the cinema, on travel and telecommunications, fashion, health and beauty products, according to an analysis of mall sales at six centres by one major landlord who says we had a good time lately.

Chris Gudgeon, chief executive of Kiwi Property Group with an NZX value of $1.7 billion, said New Zealanders had been spending up big-time - increasing spending throughout 2015 and particularly in December.

"New Zealand shoppers relaxed their purse strings in 2015, indulging on blockbuster movies, holidays, telecommunications, personal grooming, food, home electronics and fashion," said a statement from Kiwi whose malls include LynnMall, Sylvia Park and others in Hamilton, Palmerston North, Wellington and Christchurch.

Gudgeon said that was a change after a few years of parsimony.

"After several years of spending restraint, New Zealand consumers enjoyed themselves, as evidenced by a pick-up in discretionary spending over the course of 2015, capped off by a very solid month for retail sales in December.

Economists forecast that consumer spending would show robust growth in 2015, buoyed by improving household incomes, low mortgage rates, strong house prices and net migration - and we were certainly pleased to see that forecast realised," Gudgeon said.

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The trend tallies with data from Statistics NZ this month which showed New Zealanders spent a record $6 billion shopping in December, the highest monthly figure recorded. Shoppers swiped their electronic cards and spent $304 million more than throughout December 2014, an increase of 5.3 per cent.

LynnMall's $39 million expansion has boosted spending, according to Kiwi Property. Photo / Nick Reed
LynnMall's $39 million expansion has boosted spending, according to Kiwi Property. Photo / Nick Reed

But when adjusted for seasonal effects, retail spending fell 0.2 per cent in December 2015, following a 0.2 per cent rise in November 2015. Hospitality spending had the biggest increase.

"While card spending was up in five of the six retail industries in December, a significant fall in the durables industry has lowered overall card spending in the retail sector," said business indicators manager for Statistics NZ, Clara Eatherley.

Gudgeon quantified increased spending at Kiwi's malls.

Analysing retail sales data on a like-for-like basis across Kiwi Property's six malls, the big category winners of 2015 were cinema operators, with sales surging 9.6 per cent, along with commercial services (most notably travel and telecommunications) up 9.4 per cent, pharmacy and cosmetics up 6.8 per cent, personal services up 5.1 per cent and fashion, a subdued performer in previous years, showing growth of 1.6 per cent.

"While the year was undoubtedly a stronger year for many retailers, the standout month for retail sales came in December; this was a Christmas our retailers could celebrate," Gudgeon said.

Kiwi Property's total portfolio sales were up by 5.3 per cent in December compared to the same month in 2014 for its centres in Auckland, Hamilton, Palmerston North, Wellington and Christchurch (3.8 per cent on a like-for-like basis).

LynnMall, where Kiwi spent $39 million last year, has performed better with the addition of restaurants and cinemas.

"Just one month after opening, LynnMall sales growth of 11.9 per cent was recorded for December 2015 compared to the same month in the prior year," Kiwi's statement said.

- NZ Herald

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