Retail card spending drops $166m in December

Retail card spending saw a 2.5% drop in December compared with November, as consumer confidence continues to crater.

Spending on big ticket items such as furniture and appliances was down, but people’s spend on groceries and liquor was up.

“The fall in retail card spending is large for a December month, and this month’s drop is the first in nine months,” Stats NZ’s business performance manager Ricky Ho said.

While retail card spending in December saw a rise in “actual terms”, the increase was smaller than what is typically seen in past December months, Stats NZ said.

Spending fell across five of the six retail industries.

The largest fall was seen in the sale of durables – which include items such as furniture and appliances – which fell $95 million (5.7%).

Spending was also down $17m for apparel, a fall of 4.7%.

It was followed by a $26m fall in spending on fuel – a 4.3% decrease.

The only category to see an increase in spending was groceries and liquor, which rose $39 million, or 1.5%.

The total value of electronic card spending, including the two non-retail categories (services and non-retail), fell $104 million (1.2%) in December 2022.

In actual terms, retail card spending was $8.1 billion, up from $375 million (4.8%) in December 2021.

“The largest contribution to retail card spending came from groceries and liquor, which reached $3.1 billion in December 2022,” Ho said.

An ANZ-Roy Morgan survey last month saw consumer confidence fall seven points to hit a new low of 73.8.

Of the 1001 people surveyed, 23% indicated they were worse off financially now than they were at the same time last year.

More than half (54%) of the respondents said they expected the economy to worsen.

It comes after Reserve Bank Governor Adrian Orr urged Kiwis to curb spending after New Zealand’s Official Cash Rate (OCR) was lifted to 4.25% last November.

“Inflation is no one’s friend and our job is to contain inflation back to 1-3%,” he told Breakfast at the time.

“We need to stamp that inflation out, and so it’s about us thinking carefully when we’re spending, you know. Be wise.”