Retail card spending falls in August

credit card 1Total spending using credit and debit cards fell 0.8 per cent in August compared to the previous month, with declines seen in nearly all spending categories.

Retail spending fell a seasonally adjusted 0.4 percent last month following a 0.2 percent increase in July, Statistics New Zealand said. Actual retail spending rose 3.7 percent to $4.7 billion in August from the same month last year, with fuel the only one of six industry sectors measured to fall, down 6.1 percent in a move that reflected lower petrol and diesel prices.

Hospitality spending, which includes accommodation, bars, cafes and restaurants, and takeaway retailing, fell 1.5 percent, seasonally adjusted in August from July, following a jump of 3.1 percent and 2.4 percent respectively in the previous two months. Consumables, which includes grocery and liquor retailing, fell 0.5 percent in the first decline for four months. Spending on durables was unchanged in the latest month while spending on apparel fell 0.7 percent. Core retail spending, which excludes fuel and vehicle-related industries, fell 0.6 percent.

Satish Ranchhod, Westpac senior economist, said while some softening had been expected after recent strong gains, the extent of the decline was unexpected, witth a particularly marked decline in spending on hospitality,.

“However this follows strong gains over the past two months which were boosted by elevated tourist numbers, and it was inevitable that we’d see some softening as tourist numbers eased back to more normal levels,” he said.

Ranchood said lower fuel prices through August will also have reduced the level of nominal spending, “although, with lower fuel prices leaving more money in households’ wallets, this bodes favourably for spending over the coming months”.

Durables was the only category where spending did not fall, it remained flat. Ranchhod said spending on durable items like furnishings has been supported by the ongoing strength in the housing market.

In actual terms, card-holders made 131 million transactions across all industries in August 2016, with an average value of $49. The total amount spent across all transactions was $6.4 billion.

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