Retail sales up in September quarter

Crowds in Dunedin's Octagon watch the All Black-France final last month.  Rugby World Cup...
Crowds in Dunedin's Octagon watch the All Black-France final last month. Rugby World Cup visitors boosted accommodation and hospitality spending for the quarter. Photo by Stephen Jacquiery.
Retail sales values for the quarter to September - encompassing 80,0000 overseas visitors for the Rugby World Cup - posted its largest quarterly increase for almost five years; up 2.1%, or $358 million.

The gain was the largest since the quarter to December in 2006, with supermarket and grocery sales up 4.1%, or $176 million, to $4.4 billion, and accommodation up 6.5%, or $56 million, near a total $700 million.

Statistics New Zealand industry and labour statistics manager Louise Holmes-Oliver said most of each of the 15 retail sector industries posted gains for the period, with only the furniture and floor coverings sector recording a "significant" decline; down 6%.

The South Island experienced its largest increase in sales value since the series began in 2003, up 3.6%, while two-thirds of the North island's 2.2% increase came from the Auckland area.

While the 80,000 visitors are credited with contributing to increases in fuel retailing and hospitality, there was a decline in domestic travel, partly due to postponed school holidays, which would have offset some increases in the same industries.

ASB economist Christina Leung said with sales in all regions trending up, it was encouraging data for the recovery of the retail sector in general.

"The strong increase in spending volumes in the third quarter [to September] builds on a 1.1% increase in the first quarter and 1% in the second quarter, suggesting that beyond the World Cup an underlying recovery in household demand is taking place," she said in a statement yesterday.

Given the retail sector was one of the sectors which bore the brunt of the recession, Ms Leung expected that as consumer confidence continued to improve it would flow through to a continued recovery in retail spending during the coming year.

Westpac chief economist, Dominick Stephens, said the third-quarter retail spending revealed a much larger Rugby World Cup-related boost than expected or which credit and debit card data had hinted at earlier.

"The largest gains were in accommodation and food but, aside from durable goods, there were strong gains across every store-type," Mr Stephens said in a statement yesterday.

simon.hartley@odt.co.nz

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