December 2010 Spending Modest

Monday 10 January 2011
FOR IMMEDIATE RELEASE

December 2010 Spending Modest

Figures just released by Paymark, which processes 75% of all electronic transactions in New Zealand, show that the value of transactions processed during December increased 3.9 per cent, year-on-year. While this was slower than the growth rate seen in November, it was ahead of the 2.8 per cent growth rate (averaged) across the first 10 months of the year.

Paymark Head of Sales and Marketing, Paul Whiston says that despite a surge in spending at the very beginning of December, the increase in spending is reflective of modest, but improving growth across the general retail sector in recent months.

He adds that once the impact of the two largest sectors (petrol and supermarkets) is taken out of the equation, the performance of the general retail sector becomes even clearer.

“After taking petrol and supermarkets out for the month of December, we see that spending on more discretionary items rose by 2.7 per cent year-on-year; earlier in the year this measure of spending was only rising at a rate of 0.8 per cent p.a

“During December, people have been increasing their spend on takeaways (+ 24 per cent), general food/liquor (+7 per cent) and at restaurants/cafes (+7 per cent) – we dined well this holiday season,” says Whiston.

By region, retailers in South Canterbury, Gisborne and Waikato fared well during December, with year-on-year increases of 6 per cent, 6 per cent and 5 per cent respectively.

Festive growth was not experienced as much on the West Coast where spending through Paymark declined 2 per cent.

Nationally, the number of card transactions for the month was 4.2 per cent higher than the same month last year, and the debit/credit spending pattern has continued, with debit usage up 5.9 per cent and credit card usage down 0.8 per cent.

Whiston says that this is another indicator that people remain cautious about spending and are making smaller purchases, using only money that they have rather than getting into more debt.

“During 2010, Paymark’s network processed 878,000,000 transactions – that’s 24 million per day. The volume of annual transactions was up 4.4 per cent on 2009.

“We have seen the average value of card transactions trending lower, declining by 1.7 per cent in 2010 to $49.34. Broken down, the average debit card purchase averaged $35.68 and for credit card purchases, the average was $95.18,” he adds.

“While the increase in activity towards the back-end of 2010 would have been an encouraging way for retailers to end the year, the situation remains one where the near-term should be approached with caution,” he concludes.

ENDS

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