INDEPENDENT NEWS

New Data From Kiwibank Reveals New Zealand’s Penny-pinchingSummer

Published: Mon 12 Feb 2024 12:01 PM
Kiwibank, the largest New Zealand-owned bank, is providing insight into New
Zealand's penny-pinching summer with the release of the Kiwibank Household
Spending Tracker for the December 2023 quarter, and January 2024.
According to data collected from Kiwibank's electronic cards, consumer spend
rose 5% over the December quarter, but was muted compared to previous years –
up just 0.4% on 2022. Transactions were down by 3% over December compared to
2022 and down 3.3% on the quarter.
"It seems like New Zealanders opted to catch up over home-cooked meals and
reruns of Home Alone,” said Kiwibank's Senior Economist, Mary Jo Vergara.
“We saw a 6.2% increase in home and online entertainment at the expense of
nights out. And not even the allure of Black Friday and Boxing Day sales were
appealing enough for Kiwi to loosen the purse strings."
Financial conditions remain tight, and household disposable incomes are being
squeezed. As New Zealanders find ways to alleviate the pressure, discretionary
items such as home electronics are being removed from the budget.
BATTLE OF THE ANNIVERSARY WEEKENDS
Hospitality spend historically accelerates into the December period but the data
revealed a decline in 2023. The value and volume of spend at restaurants and bars
decreased by more than 3% over the quarter. Café spend fared just a little better.
The data reveals that weak hospitality spend looks to have continued into the start
of 2024, with the number of transactions made at restaurants and bars still
underperforming.
“New Zealand's two biggest cities enjoyed their respective anniversary days in
January, with Auckland taking the crown for 'Big Spender' with a 6% lift in total
spend volumes at restaurants, bars, and caf é s over the long weekend, compared
to 2023. In contrast, spending volumes during the Wellington anniversary weekend
declined by 3.2% compared to 2023,” said Vergara.
“Auckland’s Wynyard Quarter hosted the finale of the Red Bull Cliff Diving World
Series, which likely helped make a splash in spend over the long weekend.”
POT LUCKS AND LONG LUNCHES
Grocery stores experienced a 5.4% rise in spend, with December 23rd and 24th
accounting for just under 10% of the month’s total purchases. The data revealed a
6.2% rise in fruit and vegetables, as well as a 28% increase in spend on alcohol and
liquor.
“Again, this shows that Kiwi took to entertaining at home, stocking the pantry and
keeping busy in the kitchen as a way to keep discretionary spending low. There was
also a 5.1% lift at the local butcher. Meat prices have come under pressure as
products, especially lamb and mutton, from across the Tasman, continue to flood
overseas markets. The value of spend is down 1.2% from last year's levels despite the
rise in volumes,” said Vergara.
BARGAIN HUNTING
Some retail categories managed to record a rise in volumes as the value of
spending fell. The number of transactions made on home contents and furnishings
rose 1.3% compared to 2022's levels, while the value of spend declined by 5%.
Other retail, however, recorded a drop in value and spend volume. Both the value
and volume of clothing spend declined by around 11% compared to a year ago.
Home electronics experienced the same, with a 1.8% drop in values and a 3.5%
drop in volumes.
“Everywhere you looked, retailers seemed to offer bargains, discounts and deals.
For some, November's Black Friday lasted a week, while Boxing Day sales began
before we even cut into the Christmas ham. On top of that, the type of retail on
sale was across the spectrum – from clothing to couches, electronics to e-bikes,
frisbees to fridges, and hammocks to hardware.
“Overall, it’s evident that retail spend is struggling as household demand struggles
amidst tight financial conditions.”

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