Spending increases as Kiwis prepare for Christmas

Spending increases as Kiwis prepare for Christmas

Figures released today reveal a modest increase in national spending across the Paymark network, as Kiwis ready themselves for the Christmas rush.

October saw 2.7 per cent annual growth in value compared to October 2011, and a 0.3 per cent increase month on month, according to Paymark, which processes about 75 per cent of all electronic transactions in New Zealand.

Paymark Head of Sales & Marketing, Paul Whiston, says the increase is indicative of the time of year.

“The festive season is just around the corner and the October figures, while modest at 2.7 per cent, suggest we’ll see a lift in spending in the coming weeks.

“Typically we see spending build momentum from mid-November, and judging from experience, with Christmas falling on a Tuesday, spending is likely to peak on the preceding Friday,” says Whiston.

He cautions, however, that retailers need to be prudent. “Christmas is always big, in terms of both the volume and total value of transactions, and all indications suggest that trend will continue in 2012. But spending has been irregular of late, up one month and down the next. It’s important not to be too expectant – anticipate a boost but not necessarily a boom.”

While spending appears to be shaping up in time for Christmas, so too are New Zealanders, with an increase in fitness centre and gym expenditure in October (+18.6%). And as the festive season rolls around, so do the parties – and photos, which is reflected in a 19.1 per cent increase in spending on those pearly whites at the dentist.

Growth in furniture and floor coverings stores (+9.0%), hardware retailers (+7.7%) and appliance shops (+6.2%) continued the upward trend of house-related spending.

“It’s important to note that there are some significant differences in spending between the sectors,” says Whiston. “Annual growth remains low amongst hospitality providers, largely as a result of the higher than usual spending during the Rugby World Cup. Likewise, food and liquor stores, and clothing retailers experienced low or negative growth during October.”

Canterbury (+6.5%) once again came out on top with the fastest annual spending growth by region, followed closely by South Canterbury (+5.5%) and Southland (+5.3%).

Nationwide, during October, the number of card transactions was 2.6 per cent higher than a year ago, with debit card usage (+2.8%) increasing faster than credit card usage (+2.2%) for the first time since September 2011.

PAYMARK Regional Data (October 2012 versus same month 2011)
Volume (million transactions) Value of spending ($millions)
Region Last Year Current Year Volume Difference Last Year Current Year Value Difference
Auckland/Northland 31.33 31.74 1.3% $1,544.5 $1,557.7 0.9%
Waikato 5.74 5.95 3.7% $272.3 $284.0 4.3%
BOP 4.83 4.97 2.8% $239.2 $249.0 4.1%
Gisborne 0.72 0.73 1.3% $32.5 $33.4 2.6%
Taranaki/Taupo 1.82 1.87 3.2% $85.9 $88.3 2.9%
Hawkes Bay 2.14 2.21 3.2% $103.3 $106.6 3.2%
Wanganui 0.89 0.91 1.4% $38.9 $39.3 1.1%
Palmerston North 2.48 2.50 0.8% $122.3 $128.0 4.6%
Wairarapa 0.74 0.75 2.0% $35.2 $35.9 1.8%
Wellington 8.61 8.90 3.4% $388.4 $395.4 1.8%
Nelson 1.45 1.48 2.1% $71.8 $74.3 3.5%
Marlborough 0.80 0.83 3.2% $40.7 $41.8 2.7%
West Coast 0.51 0.52 2.1% $28.3 $29.1 2.9%
Canterbury 8.42 8.96 6.4% $414.1 $440.9 6.5%
South Canterbury 1.20 1.23 3.3% $65.0 $68.6 5.5%
Otago 4.16 4.25 2.1% $194.4 $200.1 2.9%
Southland 1.70 1.77 4.2% $88.6 $93.2 5.3%
New Zealand 77.55 79.59 2.6% $3,799.8 $3,901.8 2.7%
(growth rate this time last year) 1.5% 3.7%
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ENDS

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