The Rugby World Cup drove demand for TVs and computer accessories for some retailers. Photo / File
The Rugby World Cup drove demand for TVs and computer accessories for some retailers. Photo / File
Discounted sales of big-screen TVs in the run-up to the Rugby World Cup helped boost September-quarter retail spending more than three times as much as economists had expected.
Seasonally adjusted retail sales volumes rose 1.6 per cent in the three months ended September 30, more than the 0.5 per centincrease economists had generally expected, and a sharp lift from the 0.2 per cent pace of growth in the June quarter, Stats NZ figures showed. Values were up 1.4 per cent as some retailers still struggled to pass on rising costs to consumers.
Spending on consumer electronics was one of the strongest sectors in the quarter, with the volume of electrical and electronic goods sold up 4.4 per cent for a 3.4 per cent increase in value. Stats NZ retail statistics manager Sue Chapman said sales of consumer electronics and electrical appliances have consistently grown over the past seven years after a blip in March 2012.
"Higher electronic sales volumes in the quarter coincided with some retailers promoting sales of big screen televisions before the Rugby World Cup in Japan, which started near the end of September," Chapman said in a statement.
"Products like TVs, computers, and mobile phones are getting cheaper, and New Zealanders are buying more of them."
On an unadjusted basis, the quarterly volume of retail sales were up 4.5 per cent from a year earlier, for a 4.2 per cent increase in value to $23.78 billion. Spending on electrical and electronic goods rose to $919 million, up 8.5 per cent from a year earlier, although the volume sold was 15 per cent higher.
Even with that lift in volume, the sector's stockpiles at the end of the quarter were up 20.7 per cent at $440m.
Warehouse Group's Noel Leeming unit noted the Rugby World Cup drove demand for TVs and computer accessories when it reported a 7.3 per cent lift in sales for the 13 weeks ended October 27.
Grocery and supermarket retailers were able to pass on higher prices to consumers. Seasonally adjusted sales values rose 1.7 per cent in the quarter, outpacing a 1.4 per cent increase in the volume of sales. On an unadjusted basis, grocery and supermarket sales - the biggest component of retail spending - were up 3.5 per cent at $5.1b from a year earlier, with just a 1.9 per cent increase in the volume of goods sold. Inventories worth $731m at the end of the period were 0.6 per cent lower than a year earlier.
Satish Ranchhod, an economist at Westpac New Zealand, said the data was stronger than his team's forecast for a 1.4 per cent lift, which was an outlier among much more muted expectations.
"Today's strong retail spending result supports our view that New Zealand's economic cycle is starting to turn. Low interest rates are boosting the housing market, and that in turn is boosting spending appetites. Combined with increases in government spending, we expect to see retail spending continuing to lift through late 2019 and 2020," he said.
Ranchhod said the data didn't have any implications for his team's forecast for quarterly economic growth of 0.3 per cent.
ASB Bank economist Mark Smith differed, saying the stronger sales data - ASB had predicted 0.8 per cent growth - could provide a tailwind to the 0.4 per cent GDP growth they predict for the quarter. While that could see further interest rate cuts delayed, Smith said the official cash rate still looked likely to head lower in 2020 with the stronger retail sales unlikely to be sustained.
