James Ihaka

James Ihaka is a Herald reporter based in Hamilton.

DIY bonanza leads lift in spending

Retailers positive despite increase in amount spent online for overseas goods.

The Christchurch rebuild have pushed up spending on home decor items and hardware as people pick up their paintbrushes and tools. Photo / Getty Images
The Christchurch rebuild have pushed up spending on home decor items and hardware as people pick up their paintbrushes and tools. Photo / Getty Images

A hot Auckland real estate market and the Christchurch rebuild have pushed up spending on home decor items and hardware as people pick up their paintbrushes and tools, says card payments provider Paymark.

But book, clothing and shoe stores are finding conditions tough because of a strong New Zealand dollar and overseas online retailers.

Paymark head of sales and marketing Paul Whiston said there had been a 4.3 per cent increase in year on year spending over the first six months of this year compared with the first half of last year.

This exceeds the annual average growth rate in the first six months of each of the previous four years.

Paymark processes about 75 per cent of electronic transactions.

Real estate activity in Auckland and the Christchurch rebuild were probably behind a surge in purchases in some sectors including at hardware stores and appliance retailers while furniture, floor coverings and plumbing services were also in greater demand.

"I think whenever someone is selling their house and there has been a lot of activity, particularly in Auckland and Christchurch, people will tend to give it a bit of a spruce-up and a paint," said Mr Whiston.

"And with the Christchurch rebuild there will be a lot of suppliers selling to the subbies (sub-contractors) and building companies to support that growth."

Also on the up was the country's love affair with food. Specialised foods such as organic and gluten-free were up 15.1 per cent and takeaway food, cafes and restaurants were up 8.2 per cent.

In the travel sector, the number of transactions fell 11.9 per cent, although the value of the transactions processed was high, indicating people were booking long-haul travel through a physical retailer but smaller trips online.

Bookstores (down 8.4 per cent) were finding things particularly tough while clothing stores (up 1.2 per cent) and footwear shops (up 2.9 per cent) had shown only marginal growth and were being affected by people going online to buy their goods from overseas outlets.

"We have to balance that with the fact that our local retailers are getting a lot more savvy, and I think there's a lot more online presence in terms of local retailers looking to compete in that area," said Mr Whiston.

Retailers Association chief executive John Albertson said despite about $1 billion of the annual $4 billion online sales going overseas, the signs of growth among retailers were positive and suggested people were coming out of a post-global financial crisis funk.

"The Auckland market is more buoyant, Christchurch is coming off a low base from last year and people are moving in there and what they are seeing in terms of DIY stuff is probably symptomatic of people coming out of a slow period and them looking at their homes and wanting to do a bit of work."

Mr Albertson said people who were using websites to buy goods from overseas had no guarantee of recourse.

"There were quite a number of young ladies from Waikato schools who bought their ball dresses online, they had arrived and the sizes were wrong, the colours were wrong, the sewing wasn't up to standard and they had no comeback.

"That's the risk you take - you have nowhere to go, but if you buy it from a New Zealand online operator you are covered by the Consumer Guarantees Act."

The Paymark figures for last month show the Auckland-Northland region's 4.9 per cent increase in year on year value of spending paled against Canterbury which had an 8.1 per cent increase.

This was followed by Palmerston North (7.1 per cent), Nelson (5.7 per cent) and South Canterbury (5.2 per cent).


Our spending

• Value of NZ card spending for June: $3.817 billion
• For June last year: $3.648 billion

- NZ Herald

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