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Stats NZ figures show that seasonally adjusted retail sales by volume decreased by 0.1% in the September quarter, but the figures were down 2.8% on the volumes recorded for the same quarter in 2023

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Stats NZ figures show that seasonally adjusted retail sales by volume decreased by 0.1% in the September quarter, but the figures were down 2.8% on the volumes recorded for the same quarter in 2023
[updated]
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Retail activity was basically flat in the September 2024 quarter, according to Statistics New Zealand’s latest retail trade survey.

The total volume of seasonally adjusted retail sales was $24 billion, down 0.1% in the September quarter compared with the June quarter.

On a yearly basis, the September quarterly volume figures were down a further 2.8% on the comparable figures for the September 2023 quarter. 

Retail activity had picked up in the March quarter earlier this year, rising 0.5%, but fell 1.2% in the June quarter. This extended the sales decline the sector has been experiencing over the past two years.

Stats NZ said the largest contributors to the fall in retail sales activity during the September quarter were supermarket and grocery stores which fell 1.3%, and food and beverage services, down 2.1%.

“Retail activity was flat in the September 2024 quarter, with a decrease in spending in most retail industries being offset by an increase in motor vehicles and electrical and electronic goods,” economic indicators spokesperson Michael Heslop said.

Of the 15 retail industries, 10 had lower retail sales volumes in the September 2024 quarter, compared with the June 2024 quarter, after adjusting for price inflation and seasonal effects.

Stats NZ said the largest movements in sales volumes during the September quarter were in the following industries:

  • motor vehicle and parts retailing – up 4.3%
  • electrical and electronic goods retailing – up 4.6%
  • supermarket and grocery stores – down 1.3%
  • food and beverage services – down 2.1%
  • department stores – down 2.5%

On a retail sales value basis, the largest industry movements in the September quarter were:

  • fuel retailing – down 6.1% or $150 million
  • motor vehicle and parts retailing – up 3.3% $124 million
  • food and beverage services – down 1.9% or $75 million
  • accommodation – down 3.1% or $40 million
  • department stores – down 1.5% or $25 million

Stats NZ said the total value of stock held at the end of September 2024 came to $9.4 billion, which is 1.9 % lower (or $177 million) compared to a year earlier in September 2023.

The industries that had the largest stock value movements were motor vehicle and parts retailing, down 5% or $109 million and hardware, building, and garden supplies, falling 3.4% or $50 million.

Retail NZ Chief Executive Carolyn Young said the next few weeks for retailers would be “critical” as key sales periods start, including the Black Friday sales and Christmas promotions. 

“Many retailers rely heavily on strong sales during this period to ensure they have a buffer for quieter months. The turnaround in the economy can't come soon enough for the retail sector,” she said.

Subdued demand

Westpac senior economist Satish Ranchhod said retail spending wasn’t as soft as the bank had expected in the September quarter and Westpac expects it to be the “low point” for retail sales. 

Sales had been trending down over the past year as households wound back their spending in response to increases in living costs and high interest rates, he said.

Ranchhod said it would take time for the full impact of the Government’s tax cuts, inflation dropping back and interest rates falling to “pass through” to households’ back pockets and boost spending again. 

“Against that backdrop, we expect to see retail spending gradually pushing higher as we go into the holiday shopping season, with a more meaningful rise expected through mid-2025,” he said.

ANZ economists Henry Russell and Miles Workman said the latest retail trade survey data showed there was still very subdued consumer demand and a soft domestic economy.

“Looking ahead, while the tailwind from lower interest rates is expected to support a recovery in retail sales moving forward, it won’t be instant,” they said.

“Overall, the level of retail spending remains very soft, but the downward trend that has been in place since late 2021 looks to be finally arresting. That said, a meaningful recovery in retail spending is unlikely until 2025.”

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19 Comments

This recession is still just getting started

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9

Agree. As I said to Jimbo yesterday (he disagreed) I think next year will be at least as bad as this year. It’s going to take quite a while for OCR cuts to provide meaningful stimulus. Things might look a bit brighter come Spring ‘25, but until then it’s going to be a very hard slog for many.

’survive till ‘25’ was always an overly optimistic tagline.

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6

I think you are overly optimistic, perhaps its what you hope rather than expect, I fear 2025 will be a disaster economically of biblical proportions, but I hope to be wrong and will be delighted to be wrong.

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6

It’s what I expect as well as I hope. 
I think the OCR will be cut to circa 2.5 by August, and by Spring that will start to be providing some early signs of support for what will be a wobbly economy.

The lift I am expecting Spring ‘25 is a mild one!

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0

Perhaps - but retail spending is likely getting a forthcoming sugar rush from falling interest rates form relatively high levels, so discretionary spending will increase substantially for many households that make up the bulk of big ticket retail spending. 

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1

A fair point except for the gap between a lower mortgage rate and the time before refixing during during which time the damage done will create uncertainty and when in doubt do nowt will follow.

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1

That’s going to be mid ‘25 at the earliest that it has flowed through to a large proportion of people with mortgages. JFoe has some good data that illustrates this

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1

We may be looking at another 2-3k increase in costs to households from power, rates and insurances (health, house, etc.) alone in the next 6-12 months.

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2

They'll be fine.

This government gave them tax cuts to pay for the power and insurances provided by these privately owned institutions. And rates? A monopoly.

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1

I wonder if many will be a bit gun shy moving forward after the disaster of extremely low rates a few years ago where many went to town thinking that was the new norm, only to find out rates can in fact go up and rather quickly.

 

 

 

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5

Mortgage interest rates have already dropped by ~1.5% as the banks front run the RBNZ. Clearly its made little difference.  

https://www.interest.co.nz/charts/interest-rates/mortgage-rates

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1

The OCR has a guidance function and banks can get their funding from wherever they want.

Ergo, are banks actually 'front running' the RBNZ?

Or is the RBNZ being way too much of Scrooge and/or demonstrating (once again) how far behind the 8-ball they are?

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0

I feel many would just focusing on reduce debts when interest rates actually fell. 

One thing many have learnt is debt could be very painful to have, and many will reduce them when they can. 

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1

People with money are fleeing to Australia while we replace them with people with no money. 

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11

Stay alive to 26 the new mantra..?

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3

How about: Head for the sticks until 26

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2

Pretty good

how about ‘economy is bollix till 26’

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0

How about

Deflation until spring 2025 Elation!?

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0

Close the door at the end of 24.

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1