High property prices and a mentality to live in the moment have led to growth in the homeware and gardening sectors of retail, according a retail analyst. Photo / Hawke's Bay Today
High property prices and a mentality to live in the moment have led to growth in the homeware and gardening sectors of retail, according a retail analyst. Photo / Hawke's Bay Today
A culture of 'nesting' brought about by confidence in high property values added to New Zealanders' record spend of $6 billion in December, according to a retail expert.
Retail analyst Chris Wilkinson said Statistics New Zealand's recording of $6 billion spent on electronic card transactions in December was in linewith the confident mood of the retail sector.
Spending in homeware and garden sectors he called "nesting" was strong, Wilkinson said.
"All those kind of return-to-basics have been really strong.
"A lot of that is under-pinned by people being confident in their property values. Also there's a lot of strong messaging in the media, the likes of these home improvement programmes and cooking and baking programs, that's sort of at an all-time high at the moment."
Wilkinson, director at First Retail Group, said shopping in the lead up to Christmas had been prolonged and steady.
"[Christmas shopping] was very different this year...back in the old days it was extremely busy on Christmas Eves We saw it start earlier this year and it was fairly sustained right through."
Once the wallets are open they typically are open for a long time.
The arrival of major international retail stores was boosting confidence in the sector, he said.
"There's a realisation amongst New Zealand retailers that [international retailers] are a really good thing.
"It's re-inspiring consumers back into brick and mortar stores and there's that recognition that when one of these big retailers opens it really helps all the retailers around it. Once the wallets are open they typically are open for a long time."
The figures released by Statistics New Zealand today showed shoppers swiped their electronic cards and spent $304 million more than throughout December 2014, an increase of 5.3 per cent.
However, when adjusted for seasonal effects, retail spending was down 0.2 per cent in December 2015, following a 0.2 per cent rise in November 2015.
The New Zealand dollar was trading at US65.11c at 11.30am, down from US65.22c at 8am and US65.61c at 5pm yesterday. The electronic card spending figures were released by Statistics New Zealand at 10.45am.
Westpac economist Anne Boniface said a slowdown in retail spend was expected this year and regions could suffer.
"Retail spending has trucked along at a pretty solid pace over the course of the last year, supported by strong growth in house prices, a large net inflow of migrants, and solid tourist spending. As we head into 2016 we expect the pace of retail spending will gradually start to slow.
"Regional centres may feel the impact of ongoing belt tightening by farmers, while in Auckland the slowing housing market may prove a headwind for retail spending."
Kim Mundy, economist at ASB, said the bank expected spending to remain modest throughout the year.
