NZ retail sales slightly down

Seasonally adjusted retail sales were down 0.1 per cent in April compared to March, Statistics New Zealand (SNZ) said today.

The result was worse than expected by economists in a Reuters poll who had forecast a rise of 0.3 per cent.

The fall in seasonally adjusted April sales was due mainly to a 0.2 per cent fall in sales for the core retailing group, which excluded vehicle-related industries, SNZ said.

Seasonally adjusted increases were recorded for nine of 24 retail industries in the survey, with the largest dollar increases for supermarket and grocery stores (up $26 million or 2.5 per cent), and automotive fuel retailing (up $25 million).

The fuel rise of 5.5 per cent coincided with petrol and diesel price rises, and followed a 2.4 per cent drop in March and a 2.5 per cent increase in February.

Automotive fuel retailing sales were up 3.4 per cent since December, SNZ said.

The industry with the largest decrease was clothing and soft goods retailing, which fell $17 million, or 7.9 per cent. The sector had been trending down since December, dropping 4.3 per cent between then and April.

Motor vehicle retailing was down $13 million or 2 per cent, and the auto-electrical, smash repair, and tyres category dropped $12 million, or 9 per cent.

Motor vehicle retailing, which made up 13 per cent of total sales, had been trending downwards since March 2005, and was now 7.2 per cent lower than it was then.

The trend in retail trade sales, which had been increasing since May 1988, had flattened in recent months, SNZ said.

Regionally, seasonally adjusted sales were up in Auckland, Waikato and Wellington, while in other regions they were slightly lower than in March.

Auckland had the largest dollar increase, up $15 million, or 0.9 per cent, while Waikato had the largest percentage increase of 1.2 per cent, or $5 million.

Despite those figures, the sales trend for Auckland was flat, it was slowing in Canterbury, while there was a steady increase in Wellington and Waikato.

In Wellington the seasonally adjusted retail sales were up 0.6 per cent, or $4 million. In Canterbury sales fell 0.7 per cent, or $4 million.

Citigroup senior economist Annette Beacher said the flat April retail sales result was disappointing and a soft start to the June quarter.

The outcome tied in the Reserve Bank's view in last week's monetary policy statement that the strength of economic data in the March quarter was temporary, she said.

Today's retail figure would give the Reserve Bank comfort that the economy was not running away.

But only when soft economic data lowered inflation, set to accelerate towards 4 per cent, and inflationary expectations could the Reserve Bank contemplate moving towards eventually lowering interest rates.

- NZPA