INDEPENDENT NEWS

Town & Country Report Farmer Spending Trend

Published: Thu 14 Oct 2004 04:50 PM
1 October 2004
Town & Country Report Farmer Spending Trend Still Strong •
In September city dweller spending was about 0.8% stronger than normal while farmer spending was 2.4% stronger than normal. • Over the past year farmers have shown particularly strong spending growth relative to townies in the areas of department stores, hardware, bars and clubs, and recreation goods.
Last week we reported that in September BNZ.MarketView debit and credit card data showed that consumer spending grew 1.2% whereas the average September spending change since 2001 has been growth of just 0.1%. So spending recovered in September after a 4.1% easing in August exceeded the average August decline of 2.0%. This report presents a breakdown of the September spending data by urban and rural dwellers.
In September consumers living in cities decreased their spending by 0.9% from August levels while farmers boosted their spending by a relatively strong 2.2%. On average since 2001 in September citydwellers have cut their spending 1.9% from August while farmers have cut theirs 0.2%. This means that in September city spending was about 0.8% stronger than normal while farmer spending was 2.4% stronger than normal. Urbanite spending was6.6% ahead of September 2004 while farmer spending was 9.2% ahead of a year earlier.
It is best to smooth the data over three months to see the underlying trends. Doing this we see that in the September quarter urbanite was up 1% from the June quarter while farmer spending was up 0.4%. This reverses the situation seen during the June quarter when city spending growth was weak at –1% compared with farmer spending which was up 0.6%. Adding the data shows that over the past six months rural spending has been stronger than city spending.
In fact, reflecting the way in which much of the strong economic growth this cycle has come from the regions, over the entire year to September rural spending increased 6.9% from the year to September 2003 while urban spending rose 5.0%. The gap between spending growth using this longer term measure has been a relatively constant 2% for all this year showing that retailers in farming areas are likely to have performed better than city-based retailers over the past year.
The debit and credit card spending data can be broken down on a storetype basis. The level of volatility in monthly and especially storetype data means one should focus on three month smoothed changes at best rather than monthly variations. Looking just at storetype spending changes in the year to September 2004 versus the year to September 2003 we find the following significant variations.
Urban consumers have shown greater growth in spending in fresh meat, fruit & vegetables up 6.6% versus 1.3% for farmers, takeaway food at 17.5% versus 16.2%, appliances at 9.3% versus 7.5%, chemists at 8.1% versus 6.4%, and automotive fuel at 10.5% versus 8.1%. Farmer spending growth has outpaced urban spending growth in almost all other categories over the year including department stores at 10.1% versus 7.0%, hardware at 11.8% versus 7.0%, bars & clubs at 11.8% versus 9.6%, and recreational goods at 5.7% versus 2.1%. 3 mths to September Year to September 04 vs.
3mths to June vs. year to September 03 City Rural City Rural Supermarket and grocery 0.6 2.5 2.1 5.3 Fresh meat, fruit etc 4.6 2.1 6.6 1.3 Liquor -0.4 4.8 -3.2 2.3 Other food 8.1 7.4 2.0 9.3 Takeaway food 5.2 4.4 17.5 16.2 Department stores -1.1 -4.4 7.0 10.1 Furniture and floor coverings 7.0 8.0 7.6 10.0 Hardware -3.8 -6.5 7.0 11.8 Appliances 5.1 1.1 9.3 7.5 Recreational goods 5.6 0.8 2.1 5.7 Clothing and softgoods -11.3 -15.1 3.9 5.2 Footwear -19.9 -25.6 2.8 3.2 Chemist 1.3 0.7 8.1 6.4 Household equipment repair 7.8 10.9 17.7 57.2 Other retailing -2.0 -2.7 9.6 12.4 Accommodation 4.7 -3.5 2.5 3.2 Bars and clubs 2.7 3.4 9.6 11.8 Cafes and restaurants 2.7 2.1 6.7 6.7 Personal and household hiring 8.7 10.8 10.6 16.8 Other personal services 5.6 6.3 7.5 6.9 Ex-auto 0.0 -0.8 4.7 6.9 Auto Fuel 1.9 2.0 10.5 8.1 Elec. services, smash repair 2.0 2.3 4.1 7.9 Auto repair & services 4.1 5.0 12.9 11.5 All 0.2 -0.4 5.3 7.1 About BNZ.MarketView: Analysis in this commentary is based on data from BNZ.MarketView, a product that is a collaboration between Bank of New Zealand and MarketView Ltd. BNZ.MarketView analyses approximately seven million transactions that are made by Bank of New Zealand debit card and credit customers per month. BNZ.MarketView covers transactions undertaken with about 60,000 retailers and with a monthly value of approximately $0.5 billion. BNZ.MarketView data – which can be analysed in multiple ways, including store type and area – is available for purchase by retailers and other organisations that are seeking the latest and fastest data. Enquires to Bank of New Zealand, ph 0800 737 774. www.bnz.marketview.co.nz.
This publication has been provided for general information only. Although every effort has been made to ensure this publication is accurate the contents should not be relied upon or used as a basis for entering into any products described in this publication. BNZ strongly recommends that readers seek independent legal/financial advice prior to acting in relation to any of the matters discussed in this publication.
Neither the Bank of New Zealand nor any person involved in this publication accepts any liability for any loss or damage whatsoever that may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication.
ENDS

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