Rugby World Cup boosts retail, says HSBC

14 November 2011

Rugby World Cup boosts retail, says HSBC

Retail trade was strong in Q3, largely due to a boost from the Rugby World Cup. Stats NZ tells us some 80,000 visitors arrived in Q3 which helped lift sales by 2.2% q-o-q in volumes. The main drivers of growth were supermarket stores and accommodation. While these data are a positive development, global risks are prominent and may still see the RBNZ in less of a rush to normalise policy settings.

Facts
- Retail sales volumes rose 2.2% q-o-q. Consensus had in mind a rise of 0.6% q-o-q as did HSBC. Core retailing (ex-autos) increased 2.4% q-o-q. Both measures showed the largest quarterly increases since December 2006. The arrival of some 80,000 visitors for the Rugby World Cup was a significant contributing factor for the quarterly result.

- The main drivers during the quarter were supermarket and grocery stores (+3.8%) and accommodation (+6.5%).

- In value terms, total retail sales rose 2.1% q-o-q. Over the year to September, total retail sales have increased in value and volume terms by 6.3% and 3.9% respectively.

Implications
The highly anticipated boost to spending from the Rugby World Cup did not fail to disappoint, with retail sales rising strongly and by more than consensus in Q3.

However, other indicators of economic conditions - including employment, the PMI and the PSI - have shown weaker readings in the past month.

Heightened global risks also suggest that while the policy rate still remains at emergency levels, the RBNZ may be in less of a rush to lift rates than previously thought.

Bottom line
A rise in retail sales in Q3 due to the Rugby World Cup is a welcome development.

However, global risks are clearly prominent and may have more bearing on RBNZ moves than local developments.

Paul Bloxham, Chief Economist (Australia and New Zealand)
Luke Hartigan, Economist (Australia and New Zealand)
HSBC Global Research
Economics - Data Reactions
14 November 2011

ENDS

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