Worldline NZ data shows that retail spending slipped 0.5% in August when compared with the same month in 2023

August saw still not-good, but less-bad, retail sales, giving retailers some hope better times might be ahead after a really rough winter.

Data released by electronic payments company Worldline NZ shows consumer spending through core retail merchants (excluding hospitality) in its payments network reached $2.89 billion in August 2024.

And while this was down 0.5% compared with August 2023, it's an improvement on the annual decline of 2.6% seen in July.

Worldline NZ’s chief sales officer, Bruce Proffit, says although spending did increase weekly from the second week of August onwards, spending for the month overall remained below levels seen at the same time last year.

He did say though that the uptick in spending was the start of a rising spending pattern that usually runs into Christmas, "giving retailers hope that a pickup in annual spending growth is also imminent".

"There is a temptation to attribute the rising spending trend within the month to interest rate cuts and improving business confidence levels. While these factors are likely to feed through to increasing spending, the improved trend seen during August was largely due to the usual seasonal increase that occurs at this time of year," Proffit said.

Stats NZ's electronic card transactions data for August is due to be released next week. But the Stats NZ figures have for the past six consecutive months registered falls in spending.

Likewise the Stats NZ quarterly retail sales figures showed a 1.2% drop in activity during the June quarter, reaffirming how tough the environment has been. Recall, of course, that NZ's GDP has recorded falls in four of the last six quarters, and the results (yet to be released) for the June quarter are universally expected to show another decline.

Proffit says there is no doubt that it has been a tough winter for retailers, and the seasonal lift in spending that tends to occur around now and run into Christmas will be extra welcome this year.

Retail NZ's chief executive Carolyn Young said "it may be some months" before retailers have "turned the corner".

Recent economic indicators showed that inflation has come under control and interest rates are on the way down, but remain a factor, alongside profitability as retailers margins are squeezed, she said.

"In August we have seen tax breaks together with the cuts in the Official Cash Rate and a small improvements in consumer confidence, however these factors are yet to have a major impact on consumer spending as outlined in the Worldline data.

"We are hopeful that if businesses can survive the next few months then we may turn the corner in time for Christmas trading."