Signs of softening in retail spending

People  cram George St, Dunedin, in search of Boxing Day bargains. Since then, retail spending...
People cram George St, Dunedin, in search of Boxing Day bargains. Since then, retail spending has softened. Photo by Gregor Richardson.
Retail electronic card spending in June was up more than $200million compared with a year ago, but spending has shown increasing signs of softening during the past three months.

In June, retail spending rose $206million, or 5%, on the same month a year ago to $4.3billion.

However, the June 2015 figure was only 0.5% up on the May total, Statistics New Zealand business indicators manager Neil Kelly said yesterday.

''Fuel spending had the largest rise, returning to the levels seen before the price falls of late last year. The rise in fuel was partially offset by falls in apparel and durables spending,'' he said.

But core retail spending, which excludes vehicle-related industries, was flat in June 2015, following a 0.4% rise in May.

Economists say household spending is ''past its peak'' and June had been a ''soft'' month.

Westpac senior economist Dominick Delbruck said during the past three months core spending rose just 0.1%, compared with the previous three months to March, when it was up 2.6%.

''With the exception of consumables, up 0.5%, the softness in retail card spending was fairly widespread,'' he said in a statement yesterday.

ASB rural economist Nathan Penny said household spending appeared to be past its peak recorded in early 2015.

''We expect it will slow further from here as confidence wanes, particularly in the dairy regions, but also on concerns over Greece and China,'' he said in a statement yesterday.

Retailers were particularly downbeat in the latest business confidence survey published this week by the New Zealand Institute of Economic Research, BusinessDesk reported.

The survey showed retailers pared back expectations for sales in the second quarter.

simon.hartley@odt.co.nz

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