Official figures show spending on food and groceries rose a whopping $376 million in the past month; elsewhere it's a predictably grim story

Official figures show spending on food and groceries rose a whopping $376 million in the past month; elsewhere it's a predictably grim story

If it feels like you've been spending a lot at the supermarket recently - well, you have. Statistics New Zealand reports that food and grocery spending rose a massive $376 million (17%) on a seasonally adjusted basis last month.

Stats NZ's retail statistics manager Sue Chapman said groceries had record high sales in March and the increase was the largest dollar value and percentage increase in grocery sales since the retail card spending series began in 2002.

"Supermarkets remain open as an essential business and there have been widespread reports of people stocking up on food as the month progressed," she said.

But as you might imagine, with the lockdown kicking in late in March, the good news pretty much began and ended with the supermarkets.

Total retail sales fell $231 million (3.9%) in March 2020, after adjusting for seasonal effects. And this was the biggest fall on record in both percentage and dollar terms.

ASB senior economist Mark Smith said that picking what the precise movement in the March figures would be "was always going to be a lottery".

"That said, the 3.9% reported fall in March was more than we had expected. Movement in many of the industry categories was extreme."

He said April figures will likely be weaker still for non-essential retail not able to benefit from online purchases.

"With social distancing expected to remain and with the household sector facing sizeable job losses, weakened incomes and balance sheets, it will take a while for the retail sector to rediscover its mojo."

Back on the detail of the figures - spending on eating out and accommodation plunged more than $300 million or almost one-third in March in the wake of measures to slow the spread of COVID-19.

“Efforts to slow the spread of COVID-19 in the last couple of months led to the closure of all non-essential businesses and people were told to stay at home from midnight March 25,” retail statistics manager Sue Chapman said.

“This hit hospitality hard. Restaurants, cafes, and bars, as well as hotels, motels, and other accommodation, saw sales drop sharply.”

Spending on hospitality fell the most of any retail industries in dollar terms, with $338 million (30%) less spent on eating out and staying in hotels and motels.

“Hospitality was also affected by fewer international visitors due to travel restrictions since February,” Ms Chapman said.

“The border restrictions came into effect from midnight 19 March to almost all travellers, except returning New Zealanders,” she said.

Fuel spending was down $113 million (19%). This coincided with both the drop in pump prices in the month and lower volumes sold due to New Zealand moving into the COVID-19 Alert System from 21 March, which restricted all non-essential travel.

Sales of clothes and shoes (apparel) fell $98 million (31%).

Furniture, hardware, and appliances (durables) sales were down $57 million (3.9%) and motor vehicles were down $38 million (20%).

Core retail spending (which excludes vehicle-related industries) decreased 1.5% in March 2020, after a 0.7% rise in February.

The total value of electronic card spending, including the two non-retail categories (services and non-retail) was down 8.7% in March 2020, after a 0.4% rise in February.

The largest decrease was non-retail (excluding services), which includes travel, gambling, and wholesale. This industry was down $359 million (20%).

In actual terms, retail spending using electronic cards was $5.7 billion, down $103 million (1.8%) from March 2019.

For the first time, Stats NZ published "lower-level card spending data" including the travel and tour arrangement industry to help New Zealanders assess the impact of COVID-19. 

Card spending on travel fell 53% ($66 million) in March 2020, in the wake of international and domestic travel restrictions to slow the spread of COVID-19. This fall is three times bigger than the previous largest drop in January 2008 when spending fell 12 percent ($21 million).

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28 Comments

Good thing they didn't apply for the Wage Subsidy huh......

Their wage subsidy.. most of it already gone to Landlords, or ..chirp in to Banks for mortgage booster payment? he heh.

https://www.stuff.co.nz/business/120926025/coronavirus-rush-at-supermark...

Hundreds of people are queuing in supermarket lines before stores shut on Good Friday.

Same thing happens every year, you'd think there's a bloody pandemic or something....

Maybe the Labour Government should do the same as they do whenever they think there is a pot of gold somewhere ...........try and slap an extra tax on its profits .

Anyone remember the clamouring to slap an extra tax on Bank Profits a few months ago , or the clamour to slap additional taxes on property investors (CGT) , or tax fuel Co's more ?

Why not hust levy a 45% Company tax rate on supermarkets ?

"were all in this together" Supermarkets are creaming it. While a considerable amount of other businesses are hemorrhaging cash. Spoke to the store manager of an east Auckland supermarket (yellow one) he reckoned they were doing 750K a day leading up to lock down.

Supermarkets are creaming it at normal times. You can tell when the store owners are meeting at Foodstuffs head offices because the carpark is full of every kind of exotic italian supercar known to man. It's obscene.

There needs to be a proce fixing investigation centring on FoodStuffs. Prices in NZ are way out of line compared to the cost of produce. It looks on the surface they using buying power to push down farm prices are duopoly power to raise retail and wholesale prices.

Farms are complete price takers. Foodstuffs and Progressive have absolutely no ability to push down farm prices.

So having a monopsony on farmers produce doesnt give them any power to push down farmgate prices?

They don't have a monopsony, so no.

If that was actually the case then why did my ex neighbour the market Gardner sell his land off for housing?
He told me he was sick of the supermarkets dictating how much they would pay him, and the delaying payments by several months.

Absolutely. This is daylight robbery. We should not, as a nation and a government, tolerate this price-gouging.
We should make everything possible to promote the entry into the NZ market of the likes of Aldi, or similar hard-discount chains. They would easily destroy this criminal duopoly. If I had an alternative, I would not spend a dime on the existing duopoly.
When such hard-discount brands first entered the market in other countries, the results were dramatic. Interestingly enough, prior to this there were all sort of excuses (many can be seen in some of the other comments in this thread), explaining why the market was already competitive, there were big costs, etc. etc.. well, the market decided otherwise.

Ha ha, no one commenting as much when the price gouging happened in RE industry, supported by their masters (Banks!). Sorry folks!, those bricks are hard to chew ay? so now it's the turn farm/agri Bank to be 'Firm' on pricing in the name of good will to our farmers, agriculture industries - those RE moguls needs to eat proper food, trust me. Time to shine ;-)

CGT should have happened, just think if it had...you'd now be able to claim against it...

Its telling that Woolworths share price ($34.90)is HIGHER than it was in 2007 before the GFC. and only marginally off its ALL TIME HIGH

This Chinese virus is turning out to be really good for supermarkets

I hope the supermarkets start paying their workers more and pay back some of those higher profits back into the community. They've had a once in a lifetime pure Monopoly on the entire NZ food market. Naturally their revenues and profit will long-term go up as people adjust their spending patterns and eat more at home rather than at restaurants.

To many monopolies duopolies been allowed to establish in NZ in last 25 years, between them and the relentless rise of the minimum wage in the last 11 years no wonder middle income earners have stagnated.

Break up the duopoly. We need a minimum of 12 supermarket groups at least.
But it's not just about the consumers. Think of the producers, especially the new small one.
You can have a great new innovative food product. But if that doesn't suit the big two, you are history.
The two chains are the biggest block to product innovation. It costs New Zealand big.

To be fair, Foodstuffs is a great place to work. They pay above minimum wage + other benefits, they recently paid for one of their longtime checkout operators entire cancer treatment, I've had friends start out there on the checkout and get IT training in Networks, Server Management, SAP etc. and have gone on to have successful IT careers. The supermarket duopoly can be problematic, but they really do look after their staff. They also sponsor Starship, Breast Cancer Foundation and a number of other charities, not to mention local sports teams and other activities in their communities.

You're right that the usual western model of the taxpayer subsidizing low paid employees income through income credits isnt necessary here which is great but the income the owners of Foodstuffs must be taking is screwing everyone in NZ.

It's an interesting one. Firstly, Foodstuffs is a cooperative - the owners of Foodstuffs are the owners of each individual supermarket. With that in mind, the investment in building a supermarket is eye-wateringly immense. The owners of these supermarkets have huge debt burdens, large salary bills, expensive infrastructure and so on. They also have a very slick logistics network. The amount of risk the owners take on is relatively high, and it takes a long time to pay off. I'm sure if there was more competition in the market, they would adjust to it and prices would be lower for NZers, but I wouldn't go so far as to say they are screwing everyone in NZ.

Sure the same like Lotto, Alcohol, Tobacco, Gambling industries - they're great place for IT career too, mine included in the past, long time ago.
And don't forget their charities contribution to the communities, less can be saying for the startup new addiction industry. .such as vapeing.

Well that's a no sh*t Sherlock item.

But think about the flip side - all this bulk buying etc - that food has to be eaten at some point, that toilet paper used . I suspect that once this is all over supermarkets may have a lean month or so when people reduce the food they have to pre panic levels.

All this spending at the Supermarket certainly not helped by NZers seemingly inability to grow anything of their own,make their own morning tea,lunch....no far better to get it already made by someone else.

Shame isnt it considering our climate and geology that lends itself to food production

Our local new world appears to have increased prices significantly but does seem to have taken on additional staff also . Also notable is the petrol prices lack of downward movement in a time of new lows on oil aussie prices have dropped significantly some ares areas under a dollar per litre now if the tree is gouging it needs to be treated harshly as now is not the time to screw the locals

Finally Kiwis listen to RBNZ govt. call to spend, spend, spend... just pity that most of NZer acted around this Covid-19 awareness from their little piggy bank. What actually being implied initially is to borrow/loan more while the interest rates is down & will only going down further.. stimulate economy by purchasing all those discounted Holdens, purchase those old villas neglected properties above 500K, and against those borrowing big items, the banks are allowed to loan more for small items such as for weekly grocery shopping. This is a new economic paradigm, borrow/loan, credit/get it pay later.. Savings is never for grown up, it's just for kids PR play (Hence? the past 20yrst, there's no mention about it by any govt & central bank). No governance systems on this planet, specially if it's got easy money back-bone support, are willing to deflate it's own RE wealth reserve.. as that is the main signal strength of a Nation GDP. The only way? .. borrow more, print more money, limitless QEs - Now, seriously.. how many of us even worry anything beyond our estimated lifespans? - Precisely! -