BNZ.MarketView Town & Country Report
February 17 2005
• In January both farmers and city-folk cut spending from December levels by about the same amount – 22.9% and 23.1%
respectively. And in seasonally adjusted terms both results were reasonably strong at near +1.5%. • Over the past year
farmers have shown particularly strong spending growth relative to townies in the areas of liquor, hardware, groceries,
furniture, and recreation goods.
Over the year ending in January 2005 spending by BNZ debit and credit card holders living in rural areas amounted to
approximately $760m while spending by city-based card holders was $3.3b. After adjusting for variations in the numbers
of card holders these results were increases of 7.6% and 6.7% respectively. The year has been one in which farmers have
grown their spending at a faster rate than urbanites. Is this out-performance fading?
After adjusting for seasonal factors we find that in the three months to January city spending was up 0.6% while farmer
spending was up 0.4%. Three months earlier these rates of change were around the other way. So there is mild evidence
that the recent gap in spending growth is reversing.
Town & Country Consumer Spending Growth
Rural Under-performance
Trendline
Our expectation is that the rate of growth in both urban and rural retail spending will ease off over 2005 in response
to above average interest rates, static to falling house prices, easing net inward migration flows, an over-valued
exchange rate, and easing commodity prices.
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 January 2005 versus the year to January 2004 we find the
following significant variations.
Urban consumers have shown significantly greater growth in spending in fresh meat, fruit & vegetables up 9.2% versus 4.4% for farmers, appliances at 11.5% versus 7.7%, chemists at 4.5% versus 1.5%, automotive
fuel at 12.5% versus 10.5%. Farmer spending growth has outpaced urban spending growth in almost all other categories
over the year but most notably liquor, hardware and supermarkets.
3 mths to January Year to January 05 $m in vs. 3mths to October vs. year to January 04 year
City Rural City Rural All NZ
Supermarket and grocery 6.5 6.9 0.5 3.6 1777
Fresh meat, fruit etc 27.5 30.4 9.2 4.4 57
Liquor 27.8 29.0 -2.9 5.7 142
Other food -1.4 0.7 4.2 9.7 38
Takeaway food 0.7 4.6 17.7 16.4 58
Department stores 26.1 29.3 2.7 5.5 571
Furniture and floor coverings -1.1 1.7 4.2 7.1 211
Hardware 22.4 17.8 4.1 9.3 287
Appliances 15.6 21.5 11.5 7.7 252
Recreational goods 33.5 29.9 0.0 1.7 335
Clothing and softgoods 13.6 14.7 2.3 3.1 443
Footwear 22.0 26.1 2.1 1.9 65
Chemist 6.4 11.0 4.5 1.5 148
Household equipment repair -1.1 26.1 11.8 54.8 9
Other retailing 30.0 29.4 8.4 12.0 267
Accommodation 19.9 11.9 0.3 1.9 192
Bars and clubs 4.7 5.8 9.9 9.7 63
Cafes and restaurants 9.3 12.4 7.6 8.8 313
Personal and household hiring 5.1 8.1 14.0 22.1 14
Other personal services 4.3 7.4 7.5 7.0 121
Ex-auto 14.0 14.7 3.1 5.1 5363
Auto Fuel 0.3 -0.2 12.5 10.5 489
Elec. services, smash repair 4.5 -0.5 2.4 4.1 56
Auto repair & services 3.7 8.2 11.1 11.6 139
All 12.5 12.9 3.9 5.7 6047
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.
ENDS