Retail sales jump - driven by cars, food and drinks

Statistics New Zealand estimates that electronic card transactions account for 69 per cent of retail sales. Photo / NZME.

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend.

Sales rose 1.7 per cent, seasonally adjusted, in the fourth quarter from three months earlier, according to Statistics New Zealand.

Actual sales climbed 5.9 per cent from the year-earlier quarter by volume and rose 4.7 per cent to $20.9 billion in value, the first time sales have exceeded $20 billion. Sales were expected to rise 1.3 per cent in the quarter and to increase 4.2 per cent from a year earlier, according to a Reuters survey.

Sturdy consumer spending may continue in the face of low credit costs and strong employment growth. Core retail sales spending on credit and debit cards rose 0.9 per cent in January, figures showed last week. Spending on consumables rose for a fourth straight month. Reserve Bank governor Graeme Wheeler noted a falling jobless rate, strong migration, robust labour force participation and upbeat business and consumer sentiment in a speech this month that downplayed the prospect of interest rate cuts.

The New Zealand dollar jumped as high as 74.82 US cents after the data was released, from 74.48 cents immediately before. The trade-weighted index climbed to 77.51 from 77.25.

The 1.7 per cent quarterly gain is the first of that magnitude since the June 2012 quarter. Core retailing, which excludes vehicle-related spending, rose 1.5 per cent in the fourth quarter.

Twelve of the 15 retail industry types measured rose in the latest period. The gains were driven by a 3.4 per cent increase in the volume of motor-vehicle and parts retailing. Sales in the food and beverage services industry climbed 3 per cent in the latest quarter, matching the third-quarter gain, while the value rose 3.5 per cent.

Clothing, footwear and accessories retailing rose 4.4 per cent and accommodation gained 4.6 per cent. Supermarket and grocery sales fell 1.2 per cent, after a 1.6 per cent gain three months earlier while fuel retailing dropped 0.9 per cent.

Sales were strong in both the North and South islands. The value of sales in the North Island rose 1 per cent while sales gained 1.6 per cent in the south

The total value of stock held at December 31 rose 4.5 per cent from a year earlier to $7.1 billion, the first time stock held has exceeded $7 billion. The value of stock for the core retail industries rose 3.7 per cent to $5.4 billion.

See the latest retail sales numbers from Statistics NZ here: