NZ retail sales fell in April, led down by departments stores which slumped 3.3pc. Photo / Steven McNicholl
New Zealand retail sales fell in April, led by department stores, indicating there hasn't yet been a pre-GST-hike pick-up in demand as households continue to deleverage.
Retail sales fell 0.3 per cent in April, seasonally adjusted, after rising 0.5 per cent in the previous month, according to Statistics New Zealand.
No change was expected, according to a Reuters survey.
Core retail sales, which exclude vehicle-related industries, fell 0.2 per cent, in line with forecasts.
Economists are watching for any signs of a spike in spending, such as on big-ticket items, ahead of the October 1 increase in goods and services tax to 15 per cent from 12.5 per cent, with the underlying trend for a slow improvement as the jobless rate declines and consumers pay back debt.
In raising the official cash rate a quarter points to 2.75 per cent last week, Governor Alan Bollard said households and businesses would likely continue to consolidate their balance sheets.
"We continue to look for an ongoing recovery in consumer spending as the labour market stabilises and gradually improves," said Philip Borkin, economist at Goldman Sachs JBWere.
Still, "the rate of spending growth is expected to be below the rate we have become used to over the past decade" and consumer spending will be "more dependent on income growth rather than debt and leverage."
Department stores led the decline in the latest month, falling 3.3 per cent after a revised 6.7 per cent surge in March and a 3.7 per cent decline in February. Sales at chemists fell 3.6 per cent and automotive fuel retailing fell 1.1 per cent.
Among gainers, accommodation rose 7 per cent and supermarket and grocery store sales gained 0.5 per cent.
Borkin said April marked the first months since November, where core retail sales didn't miss estimates.
Credit and debit card spending for May were released last week and suggested a "modest recovery" last month, he said.
The value of electronic card transactions in retail industries rose a seasonally adjusted 0.4 per cent last month, from a 0.3 per cent gain in April, according to Statistics New Zealand. Core sales, which exclude motor-vehicle related outlets, rose 1 per cent in the latest month.
