Wet Weather Puts Damper on January Sale

07 February 2011

Spending across the Paymark network in January was slow, with the latest figures showing nationwide annual growth at 3.2 per cent for the month – below the 3.9 per cent annual growth rate reported for December, and the slowest since August 2010

Within this total trend, people continue to use their own money, with debit spending up 4.0 per cent on January 2010 and credit card usage down 0.6 per cent. The weaker figures appear to be a combination of wet weather and a general economic step-back.

The wildest day weather-wise, Sunday the 23rd of January, had the biggest impact on sales, with Kiwis spending 1.9 per cent less than on the same trading day in 2010. This equates to a drop in value through the Paymark network of approximately $5 million.

For the 14 days prior to the storm, the nationwide growth rate in spending averaged 4.1 per cent.

Paymark Head of Sales and Marketing, Paul Whiston, says that the impact of the stormy weather is one part of the picture but that other factors played a part in sluggish January sales.

“Weather does have a big impact on sales, especially the kind of storms we’ve see in the past month or so. However, other factors including changes in the general level of demand in the economy are also important to consider,” he says.

“In January, spending on items that fall outside of supermarkets and petrol was 2.3 per cent higher than during January 2010, or up 3.6 per cent in terms of the number of transactions. The change in the transaction growth rate – a measure not directly impacted by the GST rate increase – shows the mixed pattern of spending habits in recent months.

“In 2010, the annual growth in the number of transactions (excluding petrol stations and supermarkets) was running at 3.8 per cent, until the last quarter, when it jumped to 4.6 per cent, hinting at an improving trend. The fact that the number of discretionary transactions in January has returned to pre-October growth rates tells us that Kiwis are still being cautious however,” he adds.

Takeaways, which saw a big increase in late December, have had another spending upsurge in January with a year-on-year increase of 25 per cent. Hardware was also up 5 per cent for the month.

Sectors experiencing a deceleration in January included clothing (3 per cent growth year-on-year), which was down from 7 per cent growth in November, as well as accommodation, slow at 2 per cent growth year-on-year.

Regionally, South Canterbury continues a strong run, with year-on-year growth of 5.7 per cent. Taranaki and Taupo also posted positive growth, at 5.4 per cent.

The West Coast and Marlborough continue their go-slow, with annual growth decreases of -3 per cent and -5 per cent respectively.

ENDS

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