Covid 19 coronavirus: Spending halved during lockdown

The brakes immediately went on spending when the lockdown was ordered to thwart the Covid 19 coronavirus. Photo / Bevan Conley.

Statistics released today show spending in New Zealand screamed to a halt during last month's Covid-19 coronavirus lockdown - with Kiwis holding back on more than $2.6 billion.

Retail card spending across the country fell more than $2.6 billion, Stats NZ said today, as non-essential businesses temporarily shut during the lockdown.

Retail statistics manager Kathy Hicks said the significant fall was expected.

"The record decline in spending was a direct result of businesses hibernating because of the Covid-19 lockdown."

Total retail sales fell $2.6 billion (47 per cent) in April 2020, after adjusting for seasonal effects. This is the largest fall in both dollar terms and percentage change since the series began in 2002.

"The $2.6 billion drop is the equivalent of each person in the country spending about $520 less in April than they did in March," Hicks said.

All sectors showed unprecedented falls in April. Furniture, hardware, and appliances (durables) led the retail industry falls in value, down just over $1 billion (72 per cent) from March this year.

Hospitality sales, including accommodation, cafes and restaurants, had the next largest fall, down $721 million (93 per cent).

"New Zealand was under the level 4 lockdown for all but the last three days of April. The impact of restrictions on the number of overseas visitors to New Zealand contributed greatly to the hospitality fall," Hicks said.

"A small recovery in hospitality sales happened because people could buy takeaway food through contactless payment, when the country moved to level 3."

The restrictions on non-essential travel for the month, as well as lower pump prices, saw spending on fuel drop $291 million (60 per cent) compared with March.

"We can also see this reflected in much lower traffic volumes in the main centres and a fall in the supply of fuel during April, " Hicks said.

A Stats NZ Covid-19 data portal provides economic, social, and health indicators including weekly traffic counts and fuel supply volumes.

Grocery (consumables) sales had the smallest percentage fall in April, down 11 per cent ($275 million) from March.

"Supermarkets and grocery stores were open as an essential service trading through the entire lockdown," Hicks said. "Those stores alone accounted for more than 80 per cent of total core retail card sales."

"The fall in April spending follows a particularly strong March month, with widespread reports of people stocking up leading up to the lockdown," she said.

In actual terms, consumables are up 9.6 per cent ($192 million) on April 2019.

The average value per transaction rose to $73 in April, the highest value since the series began, over $20 dollars higher than the average for the last decade.

The total number of card transactions for the month of April was 50 million, which was approximately one-third of the average monthly card transactions for the last five years.

"Due to social distancing and efforts made to go out less, people were making fewer purchases with a higher transaction value," Hicks said.

In actual terms, total retail spending using electronic cards was $2.9 billion, down 48 per cent ($2.6 billion) on April 2019.