Spending up in last quarter of 2021 but will it last?

Friday, 25 February 2022

Retail has rebounds post-Delta, but the Omicron impact awaits.

Shoppers were out in force in the last quarter of 2021, new data released on Friday shows, but the jump may be short-lived.

Stats NZ said total sales volumes rose 8.6 per cent, once seasonally adjusted, in the last three months of the year, compared to a 8.2 per cent fall in September, which was the result of the Delta lockdown.

Strong rises were seen in motor vehicles and parts retailing, up 22 per cent, and in the hardware, building, and garden supplies industry, up 33 per cent. These industries had falls of 13 per cent and 15 percent respectively, in the September 2021 quarter.

Retail business manager Evie Rolinson-Purchase said some New Zealanders were maybe choosing to upgrade their vehicles or undertake home improvements rather than spending on overseas holidays

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“We are most likely seeing a surge in sales following the longer period of Covid-19 lockdowns, especially in the Auckland region,' she said.

Department stores had the next largest rise in sales volumes, up 19 per cent, followed by the food and beverage services industry with a rise of 12 per cent in the December 2021 quarter.

“We've seen higher levels of spending across many industry sectors in this last quarter of the year. However, while many retailing sectors are showing increases, hospitality businesses continue to struggle without the international visitors to New Zealand,” she said.

ASB said the increase in spending was stronger than expectations.

More recent data has suggested that this solid momentum has continued into 2022, although part of the increase evident in January card spend was due to higher consumer prices, it said.

“We don’t expect this to last, with the rapidly spreading Omicron outbreak looking to have encouraged many Kiwis to retreat into their burrows over the next month or two. Retail activity is likely to remain soft in the first half of this year.”