Retail sales jump as more people eat out

Food and beverage services recorded the largest increase in the December quarter, up 3.7 per cent. Photo / File

More people eating out helped drive retail sales values up 1.9 per cent to $444 million in the December quarter, according to data from Statistics New Zealand.

Thirteen out of 15 industries had higher sales values, with food and beverage services recording the largest increase, up 4.1 per cent to $114m, having risen by 1.8 per cent from $5.1m in the September quarter.

Supermarket and grocery stores also recorded solid increases in the quarter, up 1.5 per cent to $76m in the December quarter.

Spending on fuel rose 3.8 per cent to $74m in the last quarter of last year from a 1.9 per cent fall in the September quarter.

Spending on accommodation reported the largest fall, down 2.3 per cent.

ASB Bank said low inflation made the consumer dollar go further in the December quarter and had helped to keep the Official Cash Rate low during the period.

"While there had been fears that consumers would be hiding their wallets given the uncertainty over the election this has not been borne out in the retail figures, with the consumer set to make a solid contribution to Q4 GDP," the bank said in an economic note.

ASB said it expected annual retail growth to be more than 4 per cent this year, underpinned by positive household income growth.

BNZ said online retail sales volumes rose 1.5 per cent in the month December from November, and were up 7 per cent on the previous year, which was still well below prevailing growth levels.

Domestic online spending in December was up 7 per cent, with international sites up by only 4 per cent, although in January they grew by 12 per cent and 13 per cent respectively.

Total online sales for January were 12 per cent higher than last year, including a strong performance from local food merchants.

First Retail Group managing director Chris Wilkinson said he had anticipated the shift back to overseas growth would continue following weaker-than-usual international online spending in December.

"Our hope would be that the differential narrows, however with Amazon likely to ramp up activity this year it's almost certain that the gap will again widen - possibly to its biggest yet," Wilkinson said.

"In terms of local online growth pegging back in December, the big retailers played all their cards in the lead-up to Christmas with intense promotional activity and compelling offers."