NZ dollar falls with shrinking hospitality spend

Published: Mon 26 Nov 2018 02:38 PM
NZ dollar falls as shrinking hospitality spend weighs on retail sales
By Paul McBeth
Nov. 26 (BusinessDesk) - The New Zealand dollar fell after third-quarter retail sales missed expectations, with reduced consumer demand at restaurants and bars and smaller but more expensive grocery spending.
The kiwi dropped to 67.54 US cents as at 11.15am from 67.86 cents immediately before Statistics New Zealand released data showing flat retail sales on a seasonally adjusted basis in the three months ended Sept. 30. Economists had expected a 1 percent increase in the volume of trade after a 1.1 percent increase in the June quarter. Including inflation, the value of retail sales rose 0.6 percent in the quarter.
Hospitality spending went through a lull during the depths of winter and the start of spring, with the volume of spending down 3.3 percent, while the value of spending shrank 2.4 percent. Supermarket and grocery store spending, which accounts for about 20 percent of the volume of spending, shrank 0.2 percent by volume and increased 0.3 percent by value in the quarter.
Spending on cars and parts shrank 2.3 percent, and was down 1.7 percent after allowing for price movements. The volume of fuel purchases rose 0.5 percent, while rising prices pushed the value of spending on fuel up 7 percent in the quarter.
"The notable increase in the value of fuel sales coincided with the start of the Auckland regional fuel tax and record pump prices," retail statistics manager Sue Chapman said in a statement. "However, the rise in fuel sales was offset by falls in the food and beverage and the vehicle industries this quarter."
On an unadjusted basis, the volume of retail sales rose 2.7 percent in the September quarter from the same period a year earlier, led by a 12 percent increase in spending on electrical and electronic goods.
The volume of department store sales rose 11 percent, due in part to the inclusion of some sales retailer Warehouse Group used to report within the pharmaceutical and other stores category. That segment's sales were up 1.1 percent. The volume of spending on fuel fell 1.3 percent from a year earlier.
Including price changes, the actual value of retail sales rose 4 percent to $22.82 billion in the September quarter from a year earlier, driven by an 18 percent increase in spending on fuel to $2.24 billion. Spending on motor vehicles and parts fell 1.3 percent to $3.33 billion in the quarter, the only industry to register a decline in value terms. In volume terms, spending on cars and parts was down 0.1 percent.
The volume of spending at supermarkets and grocery stores rose 1.3 percent in the quarter from a year earlier, while the value increased 2.3 percent to $4.93 billion, accounting for about 22 percent of the value of all sales.
Retail inventories were $8 billion as at Sept. 30, up 5.2 percent from a year earlier.

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