Retail sales down 2.5pc in October

Photo / Herald on Sunday

The value of total retail sales fell 2.5 per cent, or $137 million in October, following a 1.7 per cent rise the month before.

Statistics NZ says the seasonally adjusted figures were down in part due to higher pre-GST increase spending in September.

Retailers hoping to hear news of the current Christmas retail season will get some provisional data this afternoon, when eft-pos company Paymark releases spending figures for the first week of December.

Stats NZ business statistics manager Louise Holmes-Oliver said the October retail sales took a dip after increased spending in September, which was timed to beat the GST rise.

Core retail sales - which exclude the motor vehicle-related industries - were down 1.6 per cent reversing the 1.7 per cent increase in September.

"It was noticeable that the industries that sell big-ticket items recorded increased sales in September, but had the largest decreases in October," said Holmes-Oliver.

ANZ senior economist Sharon Zöllner said the data had minor implications for monetary policy.

"The Reserve Bank in the December Monetary Policy Statement had a downbeat view of near-term consumer spending, and looking through the volatility, this data is consistent with that story," she said.

ASB said it expects the Reserve Bank will remain cautious and leave the OCR on hold until next June.

"The weakness in today's data reflects the volatility in sales over recent months as a result of households bringing forward purchases of big-ticket items in anticipation of the GST increase. Beyond this volatility, the underlying trend remains one of a gradual recovery in retail spending," ASB economist Christina Leung said.

Ten of the 15 industries had decreases, with the largest being:

- Motor vehicles and parts, down 12.6 per cent ($85 million)

- Furniture, floor coverings, houseware, and textiles, down 27.8 per cent ($47 million)

- Electrical and electronic goods, down 15.2 per cent ($34 million).

The largest increase was in supermarket and grocery stores, up 4.2 per cent ($58 million). All the food and drink related industries recorded increases.

The sales trend for total retail has been rising since February 2009, up 6.6 per cent since then. The sales trend for core retail has been rising since February this year, up 2.3 per cent.

- NZ HERALD ONLINE