NZ retail sales rise a record 2.7% in 1Q as back-to-school drives electronic goods
New Zealand retail sales rose at a record pace in the first three months of 2015 as the start of the school year underpinned demand for consumer electronics such as laptops and tablets.
The volume of sales rose a seasonally adjusted 2.7 percent in the three months ended March 31, accelerating from a pace of 1.9 percent in the December quarter, according to Statistics New Zealand. That beat the 1.5 percent growth predicted in a Reuters survey of economists. Stripping out vehicle-related spending, retail sales rose 2.9 percent, led by an 8.9 percent gain in sales of electrical and electronic goods. The actual volume of sales in the March quarter was 7.4 percent higher than the same period a year earlier.
"Our discussions with retailers suggest that there's no one thing in particular behind this, but there may be a strengthening back-to-school effect," Stats NZ acting business indicators manager Tehseen Islam said in a statement. "This seems to mean that spending on things like laptops and tablets is having an impact on overall spending at the start of the school year."
The kiwi dollar rose to 75.5 US cents from 75.17 cents immediately before the report was released, on speculation signs of stronger growth will, at the margin, reduce the prospects for Reserve Bank interest rates cuts this year.
Consumer electronics have been under pressure in recent years as technology advances, a strong New Zealand, and intense demand has led to price falls and increased discounting by retailers. The volume of electrical and electronic goods sales was 19 percent higher than the same quarter a year earlier, while the value rose 7.5 percent to $664 million.
Warehouse Group, the country's biggest listed retailer, this month reported a 5 percent increase in sales for the three months ended April 26, saying its 'Red Shed' general merchandise stores benefited from a strong performance during its 'back to school' period.
Consumer confidence has been bolstered by low interest rates, cheap petrol and a general recovery in the economy, though recent wage data and tepid inflation has raised some concerns that retail spending might come under pressure if household earnings remained static and figures for electronic card spending showed a slowdown sales in April.
Today's data show the total value of retail spending, which includes price adjustments, rose a seasonally adjusted 1.7 percent in the quarter, accelerating from a pace of 1.4 percent in the December period. Stripping out vehicle related spending, the value of sales rose 3 percent. The actual value of sales rose 5.1 percent to $19.25 billion in the March quarter from the same period a year earlier.
The volume of spending on supermarket and grocery goods, the biggest component in the data, rose a seasonally adjusted 1.2 percent in the quarter, for a 2.7 percent increase in value. On an actual basis, the volume of spending on supermarket and grocery goods was up 2.2 percent, while the value rose 3.9 percent to $4.4 billion.
The volume of spending on fuel rose a seasonally adjusted 3.5 percent in the quarter, while the value was down 5.7 percent. On an actual basis, the volume of spending on fuel was 7 percent higher than the same quarter a year earlier, while the value of spending on fuel fell 8.8 percent to $1.82 billion.
The volume of spending on hardware, building and garden supplies rose a seasonally adjusted 3.9 percent in the quarter for a 3.6 percent increase in value, while furniture, floor coverings, houseware and textile spending volumes advanced 3.3 percent for a 3.1 rise in values.
On an actual basis, the volume of spending on hardware, building and garden supplies was 9.1 percent higher than a year earlier, for a 9.5 percent lift in the value of spending to $1.5 billion. The volume of spending on furniture, floor coverings, houseware and textiles advanced 11 percent in the March quarter from a year earlier, while the value climbed 11 percent to $514 million.
Accommodation spending got a boost from the Cricket World Cup in the quarter, with the seasonally adjusted volume up 7.1 percent and the value rising 6.9 percent. the volume of spending on food and beverage rose a seasonally adjusted 1.2 percent in the quarter for a 1.9 percent lift in value.
On an actual basis, the volume of accommodation spending was 14 percent higher than a year earlier for a 15 percent rise in the value of spending to $1 billion, while food and beverage volumes climbed 9.3 percent for a 11 percent increase in the value of spending to $2.17 billion.