‘Stagnant’ retail spending stretches to 18 months, says Westpac

(Source: Bigstock)

Retail spending in New Zealand has been stagnant for more than 18 months, Westpac reported after analysing data from its issued debit and credit cards.

For the three months ended May, Westpac card spending was up 3 per cent year on year. However, the bank said the increase was neglectable as spending last year was impacted by severe weather across the country.

Regarding the longer-term trend, spending levels have tracked sideways for more than 18 months, despite the 3 per cent increase in retail prices and a 2 per cent population growth.

Westpac attributed this to the continued cost of living pressures, with households facing rising costs of rents, insurance and mortgage. In addition, New Zealanders are increasingly concerned about their job security and the economic outlook in general.

Retailers of both essential products such as grocery and discretionary items like furnishings or dining out have reported declines in sales. Many businesses said margins are being squeezed, with increasing pressures from operating costs.

Local retailers have also faced competition from large online retailers and distributors, like Amazon, Temu and AliExpress. Low online prices and a wide range of options have seen increasing numbers of customers switching their spending away from local stores and websites.

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