Retail card spending continues rebound on loosening restrictions

Retail electronic card spending rose for the fourth consecutive month in July to $6 billion, according to StatsNZ.

Since New Zealand exited its Stage 4 lockdown in April spending has gradually recovered, with spending in July 2020 11 per cent higher than July 2019.

“For the third consecutive month, card spending on the long-lasting goods (durables) remained at higher levels than last year, after falling sharply during April’s Covid-19 lockdown when stores were shut,” retail statistics manager Kathy Hicks said, with durables up 20 per cent compared with the same period last year.

The next highest spending increase was seen in the grocery market, with supermarkets, specialised foods and liquor stores up 12 per cent on last year – or $245 million. 

“Kiwis are continuing to spend up on groceries and beverage-related supplies following another month of loosened restrictions,” Hicks said.

And while accommodation spending remains low, spending in the food and beverage services drove an increase in the hospitality industry – up 11 per cent, or $92 million. 

Spending on accommodation was down 16 per cent in July, and reflects a lack of international tourism as people world-wide largely agree with stay at home orders and border closures. 

However, according to the Retail NZ’s recent Retail Radar report, while sales grew in July around 22 per cent of retailers are claiming their sales fell, meaning certain segments are seeing growth while others struggle.

“While the recovery from COVID-19 is underway these remain unprecedented times and many challenges remain for retailers. Consumers will be very cautious about spending in the coming months, with the uncertainty an election period brings,” Retail NZ chief executive Greg Harford said.

“It is essential to the whole economy that spending continues to grow, and further assistance from government to stimulate the economy, such as tax or GST cuts, is strongly supported by retailers.”

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