Retail sales slump after Cup boost

New Zealand consumer confidence eased in March as cautious consumers remained focused on debt. Photo / Herald on Sunday

New Zealand retail sales fell in the first three months of the year as people reined in spending on supermarket and grocery items after a spend-up during the Rugby World Cup.

The total volume of spending fell a seasonally adjusted 1.5 per cent to $17.02 billion in the three months ended March 31, according to Statistics New Zealand. That was broadly in line with a 1.4 per cent contraction forecast in a Reuters survey of economists.

Stripping out motor vehicle-related spending, core retail sales volumes dropped 2.5 per cent to $13.28 billion, the biggest decline since the series began in 1995.

The bulk of the loss came from a 7.4 per cent decline in the volume of sales at supermarkets and grocery stores to a seasonally adjusted $4.04 billion, the smallest quarterly volume since September 2010. That was the sharpest fall for those stores since the series started, and snapped two quarterly gains.

In value terms, which accounts for both volume and price movements, spending at supermarkets and groceries dropped 6.2 per cent to a seasonally adjusted $4.18 billion. Prices rose 1.6 per cent in the quarter.

"The industries that led this drop are the same ones whose sales were boosted during the cup - supermarkets, accommodation and fuel," industry and labour statistics manager Blair Cardno said in a statement. "Although sales volumes have fallen, they are still above their pre-cup levels."

The quarterly volume of accommodation sales fell 5 per cent to $624 million, while the value of spending declined 4.5 per cent to $659 million. The volume of spending on fuel shrank 1.9 per cent to $1.62 billion, while the value increased 0.7 per cent to $1.93 billion.

The figures come after April credit and debit card spending data showed a monthly increase in spending, with gains across all core retail sectors except apparel. Last week, Warehouse Group said its clothing and footwear unit was the only division that didn't show a pick-up in demand at its Red Sheds in the three months ended April 29.

The value of total retail sales shrank 0.8 per cent in the first three months of the year to a seasonally adjusted $17.43 billion. Unadjusted retail sales rose 4.4 per cent to $17.22 billion from the same quarter a year earlier, while volumes rose 3.4 per cent.

The value of actual retail stocks rose 2.7 per cent to $6.2 billion from the same quarter a year earlier, led by a 29 per cent increase in stocks held by non-store and commissioned based retailing, and a 12 per cent rise in liquor stocks. Supermarket and grocery store stocks shrank 1.9 per cent to $619 million.