Retail sales charged to electronic cards last month were flat, as a fall in vehicle fuel sales offset a rise in core retail sales.
The 0.7 per cent month-on-month rise in the seasonally adjusted value of card transactions in the core or non-automotive retail sector is slower than the 0.9
per cent recorded in June or 1.1 per cent in May. Compared with July last year sales were 3.7 per cent higher.
The biggest increase was a 2.1 per cent rise in spending on consumables. "We wonder if this is a reflection of higher food prices starting to emerge," said Goldman Sachs JB Were economist Philip Borkin.
Spending on durables (excluding cars) rose 0.8 per cent - scant evidence yet of a rush to buy big-ticket items before the GST increase on October 1.
The 3.1 per cent fall in vehicle sales was despite a 3c-a-litre rise in petrol prices last month, when the emissions trading scheme kicked in.
"Our industry contacts suggest retailers are still having to discount aggressively to get foot traffic and drive turnover," Borkin said.
ASB economist Christina Leung said recent labour market data pointed to subdued wage growth, which meant households would remain cautious in the near term. "Reflecting this, optimism of increased sales amongst retailers shows signs of waning in more recent business surveys," she said.
