Christmas card spending fails to fire

By Ben Chapman-Smith

Photo / Thinkstock
Photo / Thinkstock

Kiwis spent more on their credit and debit cards in December compared to the previous month but retailers saw little in terms a Christmas spending boom, show new figures out today.

Statistics New Zealand said the total value of electronic card spending rose 0.4 per cent in last month, after a 0.7 per cent rise in November.

There were 122 million transactions, with an average value of $56. The total amount spent across all transactions was $6.8 billion.

"Shoppers spent more in all retail industries, except fuel, in December," industry and labour statistics manager Blair Cardno said.

Spending among retail industries increased only 0.3 per cent from November, compared to monthly rises of 0.7 per cent back in March, April and May last year.

The value of transactions in the core retail series was up 3.2 per cent from Decembe 2011.

All core retail industry groupings saw improvements, with consumables and durables showing the biggest movements, up 0.8 per cent and 0.6 per cent respectively.

Consumables includes food and liquor retailing and durables industry includes furniture, hardware, and appliance retailing.

Fuel was the sole industry in which the value of transactions fell, sinking 3.5 per cent month-on-month.

Core retail, which excludes motor vehicle-related industries, increased 0.5 per cent in the month.

Cardno said trends for the value of transactions in all the series - total, retail, and core - have all generally been increasing since they began in October 2002.

Westpac senior economist Michael Gordon said card spending, particularly in the core retail categories, is showing some signs of life after the September quarter "flat patch".

"This adds to the list of indicators that the economy's mid-2012 slowdown will prove to be short-lived," he said.

"Fuel spending fell 3.5 per cent, in a month where we estimate that prices fell only slightly."

ASB economist Daniel Smith said spending growth in most categories suggests stronger retail spending in the last quarter of 2012 than in the "somewhat lacklustre" third quarter.

The fall in fuel spending can be only partly explained by slightly lower petrol prices on average over the month, Smith said.

"However, card spending on fuel increased by a massive 12.3 per cent in August 2012, so some unwinding of that increase is not surprising.

"Card spending on fuel remains at a healthy level, 5.9 per cent higher than a year ago."

Last week, Paymark figures also showed retailers enjoyed only a modest improvement in spending patterns over December.

The company, which processes about 75 per cent of all New Zealand's electronic card transactions, said spending through its network lifted only 0.5 per cent from November to December 2012.

Despite the positive spending in the week leading up to Christmas, the December month in total increased by a below average 2.3 per cent year-on-year, the company said.

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