Cardholders spent $8.6 billion and made 157 million transactions in September, but electronic card spending still ends the month flat

Statistics New Zealand says total retail spending was flat during the month of September but core retail spending edged up by 0.3%.

On an annual basis, total spending fell by 5.6% compared to September 2023.

Stats NZ said on Monday that core retail spending – which doesn’t include fuel and vehicles – rose 0.3%, or $19 million, in September.

Spending on cards on a seasonally-adjusted basis came to $6.382 billion, according to Stats NZ, the same as a month prior in August.

Cardholders made a total of 157 million transactions across all industries during September, averaging $55 per transaction, resulting in total electronic card expenditure of $8.6 billion.

The number of card transactions in September was down 4.2% compared to August, while total electronic card expenditure was $400 million lower than August’s total.

Stats NZ said seasonally-adjusted specific movements by retail spending category in September 2024 included:

• hospitality, up 1% or  $12 million
• consumables, up 0.2% or $4.1 million
• apparel, up 1.1% or $3.6 million
• motor vehicles (excluding fuel), up 0.8% or $1.4 million
• durables, down 0.5% or $7.8 million
• fuel, down 3.1% or $16 million

On a quarterly basis, seasonally adjusted changes in the September quarter compared to the June quarter showed electronic card spending fell by 0.7% or $135 million.

Core retail spending which strips out fuel and vehicles fell by 0.5%, or $91 million, when comparing the September quarter with the June quarter.

Electronic card spending inched up 0.2% during August, breaking a sixth month streak of falling spending. Between the months of February to July, total retail spending figure movements fell in order of 0.8%, 0.7%, 0.4%, 1.1%, 0.6% and 0.1%.

Closed wallets

Westpac senior economist Satish Ranchhod said the downturn in retail spending through the first half of the year had now “been arrested” but spending levels weren’t turning higher just yet.

“We expect that spending growth will remain modest in the near term, especially as the labour market has been softening,” Ranchhod said.

“However, spending is expected to start turning higher as we head into the new year. In addition to tax cuts, interest rates are pushing lower. With most New Zealand mortgages fixed for a period, it will take some time for interest rate reductions to flow through to households’ back pockets. But by the end of the year, many families will start to see some relief. Consistent with that, households have told us they’re starting to feel more optimistic about the outlook for 2025.”

Retail NZ Chief Executive Carolyn Young said the sector had been “delighted” that the Reserve Bank cut the Official Cash Rate (OCR) by 50 basis points last week to 4.75%  – but consumers would continue to keep their wallets “firmly in their pocket” until they saw changes to mortgages, loans and rent. 

“We are certainly hoping that there will be a lift in consumer confidence before the critical Christmas sales period,” she said.

“While the economic numbers are improving it will take some time for consumers to feel that they have additional money in their wallet. Consumer confidence is key right now and retailers are hearing that consumers are worried about their job security and only purchasing the essentials.”