Consumer spending across New Zealand has lifted in May this year to NZ$3.85 billion, but data indicates this is more due to rising transaction values rather than more transactions.
The latest data from the Cuscal Paymark (previously Worldline) network reveals that consumer spending lifted 1.2 per cent in May this year compared to May last year, which is up from a 0.1 per cent year-on-year fall in April.
Paymark’s chief sales officer, Bruce Proffit said the ongoing underlying trend of inflation as well as continued retail store closures appeared to be the key factors shaping these latest consumer spending numbers.
“The retail merchant environment is always dynamic, with stores opening and closing, stores gaining and losing market share, and the average value of transactions rising in some stores in some regions and falling in others,” Proffit said.
“This churn always exists but the net effect that has stood out in recent months is further declines in the number of merchants across a mix of store types and a higher average transaction value in total.”
Proffit said more dollars were spent through Paymark’s network in May, but this was largely due to the higher amount spent per transaction.
Notably, the number of transactions was 1.1 per cent below year-ago levels in May and down 2.0 per cent in April.
“Of particular interest is the higher average value of transactions at Food & Liquor merchants, which includes supermarkets and grocery stores, as well as restaurants and cafés. Such transactions are a large share of spending and are also difficult to avoid,” Proffit said.
Retail NZ CEO Carolyn Young said the overall lift in spending in May is encouraging after skyrocketing fuel costs drained household budgets earlier in the year.
"We are seeing consumers begin to re-engage, though people are preferring to spend on eating out rather than making significant purchases,” Young said.
Regionally, growth was strongest in key dairy farming areas expecting a strong payout from Fonterra. The Waikato region led the country with a 4.6 per cent annual increase in core retail spending, followed closely by Canterbury up 2.8 per cent.
"The strong performance in Waikato and Canterbury highlights the critical link between regional economic confidence and retail health," Young said.
The data also highlighted how vital major events are to local business communities. A key example occurred the day after Christchurch's new Te Kaha stadium hosted Six60, an event which helped boost the local retail economy by 10.6 per cent that weekend.
"Operating in the retail sector is still very challenging but the positive growth in May is welcome,” Young said.
"It shows some regions remain resilient and gives us a foundation of cautious optimism as we head into the winter months. We’ll wait to see if the broader Stats NZ electronic card data released later this month gives us reasons to be cheerful."