Economist: Sales boom won't last

Boxing Day shoppers spent $120 million in two million transactions, according to Paymark figures. Photo / Kellie Blizard

A 13.4 per cent jump in Boxing Day spending shows shoppers have been waiting for bargains.

Retailers might be enjoying a post-Christmas spending bonanza, but an economist warns the sales boom can't last. Boxing Day sales figures showed a 13.4 per cent jump in spending from the same time last year.

Paymark, which processes about 75 per cent of all electronic transactions, said there were more than two million transactions and $120 million in sales - up $14.2 million from a year ago.

The company's head of sales and marketing, Paul Whiston, said the strong Boxing Day numbers were a fantastic finish to a positive month of spending, and a return to the kinds of growth seen before the global financial crisis.

"This is the first time in five years that we've seen double-digit growth and we're rapt for retailers."

But ANZ chief economist Cameron Bagrie said the figures probably just proved that New Zealand shoppers were savvy when it came to spending their cash during sale time.

"That sort of jump tells me people have been waiting for the sales."

Consumers still needed to get their balance sheets in order, he said.

"The new so-called normal for retailers is that shoppers are pretty price sensitive and they're going to be darting from sale to sale."

There was some positive news for retailers though as next year would probably see higher spending than between 2008 and this year.

"But do I think it's going to go back to the lofty retail sales activity we were seeing pre-2007? The answer's 'hell no'."

Households still had a zero savings rate, Mr Bagrie said. The Paymark figures showed significant growth in the electronics sector including computers and phones, with sales up 31.7 per cent annually.

There was also strong growth in clothing and apparel, and jewellery, up 20.7 per cent and 24.4 per cent respectively.

New Zealand Retailers Association spokesman Barry Hellberg said Boxing Day was an important part of the post-Christmas spend.

"[Boxing Day] was one of the best results if the Paymark figures are correct. I'm sure retailers will be very pleased with the outcome.

"I think that an increase in consumer confidence, coupled with the fact that people were prepared to put their money where their mouth was in the Boxing Day sales, bodes well for a good 2013 for retail," Mr Hellberg said.

Crazy deals

Harvey Norman, Porirua: 60-inch television for $998, down from $2000.

Briscoes: 60 per cent off some products, including towels for $16 down from $40.

Kathmandu, Petone: Everything at least 60 per cent off the retail price.