Retail sales up, biggest quarterly rise since 2007

Seasonally adjusted total retail sales values increased 2 per cent in the March 2011 quarter. Photo / Herald on Sunday

Retail sales values in New Zealand rose by 2 per cent in the March quarter from December, the largest quarterly rise since March 2007, figures released by Statistics New Zealand show.

The 2 per cent rise was led by spending on vehicles and petrol over the three months. With vehicle-related categories removed, retail sales rose 0.9 per cent during the quarter. This was the highest rise in core retail sales since the September 2009 quarter.

A Reuters survey of economists gave a median expectation of a 0.5 per cent rise in core retail sales. A Bloomberg survey found a median forecast for a 0.9 per cent rise in core sales.

The New Zealand dollar initially blipped up on the figures, but soon settled. Stronger than expected sales would have led economists to reconsider their forecasts for the Official Cash Rate, which most now see increasing from December.

The March survey was the first quarterly survey from Stats NZ - retail sales figures were previously released monthly - and included new classifications to bring the New Zealand and Australian figures on a similar footing.

For the vehicle-related industries, motor vehicles and parts retailing rose 5.9 per cent over the quarter, while fuel retailing rose 5.6 per cent. The vehicle-related figures are not seasonally adjusted.

Despite the 5.6 per cent rise in fuel sales over the quarter, volumes of fuel sales fell 3.9 per cent during the three months from the December quarter. Statistics New Zealand said its measure of fuel prices rose 9.9 per cent over the quarter.

The biggest falls in quarterly sales values were in accommodation spending, down 2.9 per cent, and department store spending, down 1.4 per cent.

The largest rise was for non-store and commission-based retailing, up 36 per cent. Stats NZ said this category measured a form of selling, rather than the selling of specific goods.

The category measures sellers without a specific 'shop-front' such as internet group selling services and those working on commission and fee-based contracts.

The large rise was mainly due to seasonal adjustments, with figures for previous quarters being out of line with seasonal trends, Stats NZ said.

Spending on furniture, floor coverings, houseware and textiles rose 6.1 per cent over the quarter.

Quake effect

The strength in nationwide retail sales was not matched in Canterbury, with sales there falling 2.2 per cent in the March quarter.

The February 22 earthquake in Christchurch caused significant damage to the city, including to Statistics New Zealand's own offices there. Despite the quake, retail sales data from the region remained robust, Stats NZ said.

While figures are not generally broken down regionally, Stats NZ said it had "a fairly good idea" of what forms of spending had been affected in Christchurch.

Areas that did better than national figures were hardware, building and garden supplies, as well as liquor retailing, Stats NZ officials told journalists at a media briefing in Wellington.

Anecdotal evidence was that accommodation spending in Canterbury was hit due to the quake, as tourists opted to stay away from the city.

Annual rise

Unadjusted figures show total retail sales rose 3.4 per cent in the March quarter from the same quarter a year ago. This was the largest annual increase since the June 2010 quarter. Spending on fuel rose 8.4 per cent on an annual basis.

Removing vehicle-related categories, core-retail sales rose 2.4 per cent over the year, again the largest increase since June 2010.

Volumes

Retail sales volumes rose by a seasonally adjusted 0.9 per cent in the March quarter, the biggest increase in volumes since December 2009, and followed two quarters of falls.

Removing the vehicle-related industries, volumes rose 0.7 per cent over the quarter.

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