Strong sales in the core retailing industries, led by the food and beverage service industry, lifted retail spending in the June 2013 quarter, Statistics New Zealand said today.
The volume of retail sales rose 1.7%, which was in line with market forecasts. However, the strength in "core" retail sales figures was a surprise.
The figures demonstrate that there is a growing sense of buoyancy within the country about the economy.
This impression is further reinforced by the fact that the figures for the food and beverage sector were the strongest since Statistics New Zealand started the series in 1995.
After adjusting for seasonal effects the volume for the core retailing industries (which exclude the two vehicle-related industries) rose 2.3% compared with the March 2013 quarter. This rise is the largest increase in the series since the December 2006 quarter.
"A record increase in the food and beverage services industry topped off the widespread rise of consumer spending, with increased sales in 12 of the 15 industries for the June quarter," industry and labour statistics manager Blair Cardno said.
The total volume of retail sales rose 1.7%, with the largest movements in:
- fuel retailing, down 5.0 percent
- food and beverage services, up 4.5 percent
- motor vehicle and parts retailing, up 3.0 percent
- department stores, up 5.4 percent.
Westpac senior economist Michael Gordon said while total sales were in line with Westpac forecasts, the "real surprise" was in the 'core' sectors, in which Westpac had forecast just a 1.2% rise.
"The NZ dollar rose 10pts to US0.7980 and the two-year swap rate rose 2 basis points to 3.47% after the release," Gordon said.
"As we expected, retail trade will be a substantial plus for June quarter GDP growth, helping to offset the large negative contribution from agriculture as a result of the drought earlier this year.
"If anything, the mix of today's retail figures - with a much greater than expected skew towards the non-auto sectors and hence a smaller imported component - suggests upside risk to our current forecast of 0.3% GDP growth."
When price effects are included the value of core retail sales rose 2% ($271 million). The total value of retail sales rose 0.9% ($169 million) with sales values rising in 12 of the 15 retail industries.
Looking at the longer-term picture, the trends for both total retail sales values and volumes have been generally rising since mid-2009.
In actual terms the value of total retail sales was $17.5 billion, up 3.3% in the June 2013 quarter compared with June 2012.
The large rise in the food and beverage services industry sales volume followed a 0.6% increase in the March 2013 quarter.
This industry consists of cafes, restaurants, takeaway food and catering services, pubs, taverns, bars and clubs. Half of this industry is made up of cafes and restaurants.
The food and beverage services increase was volume-driven with little change in prices for the June 2013 quarter (up 0.1%).
The food and beverage services sales value also had the largest increase since 1995, up 4.6% ($83 million). This rise follows a 1% ($18 million) increase in the March 2013 quarter.