Retailers get welcome boost from Fifa Women’s World Cup, but more petrol pain for motorists

The New Zealand Football Ferns taking on Norway at Eden Park in the opening match of the Fifa Women's World Cup. The tournament provided a welcome boost for local retailers. Photo / Brett Phibbs / www.photosport.nz

Last month’s Fifa Women’s World Cup appears to have provided some welcome relief for local retailers as spending rose in August.

However, a surge in fuel spending as oil prices rocketed back up has put further pressure on already tight household budgets, economists say.

Retail electronic card spending in August was up 0.7 per cent, or $46 million, when compared with July, Stats NZ said today.

Core spending (which excludes fuel and vehicle spending) rose 0.6 per cent ($37m) in August, and is up 4.2 per cent year-on-year.

Meanwhile, fuel spending rose 13.5 per cent ($69m) last month as the price of Brent crude oil went over US$85 a barrel for the first time since April 2023.

The Fifa Women’s World Cup clearly boosted retail spending, ASB economist Kim Mundy said on an economic note.

Mundy said the August lift will have been a welcome change of pace for retailers after a slow start to the year.

“Some of the rise in activity looks likely to be due to the Fifa Women’s World Cup that took place from late July to late August,” she said.

“According to Fifa, there were some additional 30,000 tourists in New Zealand during the competition.”

However, New Zealand households are still being squeezed by the elevated cost of living and higher interest rates, Mundy said.

“This was evident in the ongoing retrenchment in durables spending, which fell 0.7 per cent [$12m] month-on-month in August and is now just 0.6 per cent higher than year ago levels,” she said.

“This backdrop is unlikely to change any time soon, and we expect electronic card transactions will return to pre-World Cup trends for at least the remainder of 2023.”

Mundy said the jump in fuel spending most likely resulted in less spending in other categories.

Fuel spending surged 13.5 per cent ($69m) in August as the price of Brent crude oil went over the US$85-a-barrel mark.

Motorists’ pain at the petrol pump is unlikely to ease anytime soon, with the price of Brent crude oil last week going over the US$90-a-barrel mark for the first time since November 2022.

Senior Westpac economist Satish Ranchhod said while spending levels were holding up, that masked softer conditions in the household sector.

“In part, the resilience in spending is due to strong population growth - per-capita spending growth is much softer,” he said.

“In addition, with consumer prices continuing to rise rapidly, much of the increase in spending levels reflects higher costs, rather than households taking home more goods.”

ASB’s Mundy said higher net migration levels - which today hit a new record of 96,000 annual net migration gain for the year to July - would be a tailwind for both consumption and the housing market.

“We expect that population growth will help to put a floor under spending, even if per-capita levels continue to decline,” she said.

According to Stats NZ, the total value of electronic card spending in August, including the two non-retail categories (services and other non-retail), increased 0.9 per cent ($82m) when compared with July.

In actual terms, cardholders made 164 million transactions across all industries in August, with an average value of $55 per transaction, Stats NZ said.

The total amount spent using electronic cards was $9.0 billion.

Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sport.