A Dun & Bradstreet Consumer Credit Expectations survey has found New Zealanders are more likely to put away their credit cards and use their savings to cover purchases at Christmas this year.
The online survey sampled 1000 people to forecast savings, credit usage, spending and debt performance for December.
Dun & Bradstreet general manager John Scott said it was unusual for consumers to be so reserved with credit cards during the Christmas period.
"Kiwi consumers have had a turbulent year, and it shows in their approach to spending this Christmas.
"In particular, there is an unusually conservative attitude to new lines of credit or limit increases heading into the holidays.
"While consumers appear to be shying away from new credit-related debt as Christmas approaches, many are struggling to manage existing debt levels, in particular the most vulnerable households such as those with children or a low combined income."
Shamubeel Eaqub, principal economist at the New Zealand Institute of Economic Research, said spending growth this year has been subdued, rising at a little over 3% from 2010.
The key drivers of retail spending are jobs, wages, borrowing and confidence.
"New job creation has been slow. There has been quite a bit of regional divergence - for example, massive job losses in Canterbury, but lots of new jobs in Auckland.
"Wages are beginning to grow, but have barely kept pace with living costs. We expect a small boost from wage increases to support spending, but not much room for acceleration," Mr Eaqub notes.
"Borrowing in the decade to 2007 was a big driver of spending.
"We borrowed on credit cards or against the mortgage to spend. We felt confidence to do this because house prices were rising strongly and we felt wealthy.
"That is not the case now. We have been paying down debt. We are borrowing less on consumer finance and credit cards and increasingly living within our means.
"This is a good thing, because we needed to break bad borrowing habits, but makes it hard for retailers competing for a thinner consumer wallet.
"Confidence is important to spending, too. Confidence has eased off in the past three months.
"So I would expect spending to be subdued during the Christmas period, growing at a little more than 3% from last year."
