Kiwis spend up in November, retail outlook ‘cautious’ as per capita spend drops

Stats NZ data shows electronic card spending was up across all categories in the month leading up to Christmas. Photo / 123rf

Retail spending across all categories was up last month as Kiwis stepped up pre-Christmas spending according to Stats NZ data released today, but ASB data showed spending is down per person.

Stats NZ found spending in the retail industries increased 1.6 per cent ($104 million) in November when compared with the previous month, while spending in core retail industries was up 2.2 per cent ($126m).

The total value of electronic card spending, including services and other non-retail spending, was up $71m (0.8 per cent) when compared with October, with Kiwis spending a total of $9.7 billion on electronic cards last month.

However, ASB senior economist Kim Mundy said, “Spending is still declining on a per capita basis.”

“It’s clear that households are exercising constraint amid high debt servicing costs and an elevated cost of living. Mortgage relief appears to be some way off and that will continue to hamstring retail sector spending,” Mundy said.

“We retain our cautious outlook for retail spending as we head into the holiday period and 2024. On an annual basis, total retail card spending is just 2.1 per cent higher than November 2022, despite high inflation and record-high population growth,” she said.

The biggest spending increase was for apparel, up 5.2 per cent or $17m. Motor vehicle spending had the second-largest increase, with spending up $2.9m (1.4 per cent).

Durables and consumables both had a 0.9 per cent rise in spending, up $14m and $23m respectively.

Fuel spending had the smallest increase in November, up 0.6 per cent ($3.4m).

Non-retail spending, excluding spending on services, increased $44m (2.1 per cent).

Spending on services including repair and maintenance, as well as personal care, funerals and other personal services had the only drop measured by Stats NZ, down $1.9m or 0.5 per cent.

Spending in hospitality was up 5.1 per cent ($62m) between November 2022 and November 2023.

In actual terms, cardholders made 170 million transactions across all industries last month, with an average value of $57 per transaction.

Mundy said Black Friday spending may be underpinning the rise in electronic spending.

“The degree to which households brought forward Christmas spending to make the most of deals, or are trying to spread the spending load, could have added to the lift in spending,” she said.

Mundy said December’s data will help make uncertainties more clear: “What we do know is that the macroeconomic environment has not materially changed since October. That points to ongoing spending restraint by households as they juggle higher debt servicing costs and broad cost of living pressures.”

She said however that population growth is “undoubtedly muting” the impacts of economic headwinds impacting spending.