Retail spending on electronic cards eased in November as cheaper prices at the petrol pump helped consumers spend less on fuel.
Seasonally adjusted total retail spending on credit and debit cards fell 0.4 percent in November after being unchanged in October. Stripping out vehicle-related industries, core retail spending rose 0.5 percent last month after being flat in October
Fuel spending fell 7.2 percent in November, or $48 million, versus October as average fuel prices dropped about 20 cents a litre.
“Spending on fuel was $625 million, the lowest monthly total since October 2017,” retail statistics manager Sue Chapman said.
Retail fuel prices hit record levels in October, coming close to $2.50 a litre and leading Prime Minister Jacinda Ardern to claim motorists were being “fleeced.” Ardern last week said the government wants to be “ready to go” with a policy response to its inaugural ‘market study’ into the retail fuel market as soon as the report emerges in a year’s time.
The study will be the first by the competition watchdog, the Commerce Commission, since Parliament gave it new powers to conduct studies into markets where the government is concerned there’s not enough competition.
Westpac Banking Corp economist Satish Ranchhod said lower petrol prices freed up consumers to spend more in other areas.
The largest rises in electronic card spending in November were in the hospitality and durables industries, up 1.3 percent and 0.8 percent respectively. The durables industry includes furniture, hardware, and appliance retailing.
Spending on apparel was up 0.9 percent while spending on vehicles, excluding fuel, rose 2 percent. Spending on consumables eased 0.3 percent.
Ranchhod said spending growth is expected to pick up through the holiday season and in the early part of 2019.
“Disposable incomes have been boosted by increases in government spending, including the government’s families package. That will be reinforced by recent falls in fuel prices. On top of those conditions, earlier falls in fixed mortgage rates and the related firming in the housing market are also supporting spending appetites,” he said.
Yesterday, Paymark, which processes more than 75 percent of New Zealand card transactions, said retail spending using electronic cards was only 1.2 percent higher nationwide in the first seven days of December than in the same week last year.
It suggested, however, it was a pause before another rush and that the Black Friday sale in November may have brought some spending forward.
Today’s figures show credit and debit card spending remained strong on the year. At $5.7 billion in November, spending was 4.6 percent higher than the same month a year earlier.
Cardholders across all industries made 152 million transactions in the month, up from 150 million in October. The average value per transaction rose to $50 in November, up from $49 in October.