Spending shifts to resorts in March

Spending shifts to resorts in March
11 April, 2016

Paymark figures show the seasonally adjusted value of underlying transactions through their network increased 1.3% in the March quarter and by 0.3% in the month of March.

“Our data show the spending momentum of recent years has continued into 2016. This is the 14th quarter now of underlying spending through the network at or above 1% per quarter. Other commentators have pointed to factors such as rising GDP and incomes, strong immigration and tourism, and higher house prices contributing to this momentum and we can see these forces at play in the transactions we process,” says Paymark CMO Tim McFarlane.

Underlying spending was up 7.1% between March 2015 and March 2016. Amongst the largest increases were sectors such as Accommodation merchants experiencing 18.6% higher spending through the network and a wide group of merchants providing goods related to housing (e.g. trade supplies, furniture and hardware, etc) that saw their sales increase by 12.0%.

“There were two notable differences, though, in the latest figures. The below-average monthly growth rate of March, and also previously experienced in February, points to a slowdown in the spending momentum. And data within the month shows regions outside the major centres, especially Bay of Plenty, Otago and Marlborough, benefitting from the Easter holidays.”

The highest annual underlying spending growth was 13.4% in Bay of Plenty. Conversely the annual growth rate slowed to below the national average in Auckland/Northland (6.3%), Wellington (6.8%) and Canterbury (4.8%).

“The Easter effect is shown more clearly by comparing Paymark weekly data within March.”

Spending in the week ending Easter Monday was 2.4% below the average of the previous three weeks for New Zealand amongst underlying Paymark Retail sector merchants. The regional effects ranged from 7.6% less spending in Canterbury during the Easter week to 8.7% more spending on the West Coast.

“These within-month figures provide a rare measure of the regional effects of holiday periods, as evident in the attached bar chart. Shop closures on some days do mean lower spending overall during Easter but, of more significance to the smaller regions, spending increased sharply in the resort regions. In dollar terms, the $3.6 million gain in transactions in Bay of Plenty (+6.9%) was highest. Not surprisingly, the Food service and Accommodation sectors in the Bay of Plenty benefitted most”.

Spending through underlying Paymark Food Service merchants in Bay of Plenty was $1.5 million higher in Easter week (+20.4%) compared to the average of the previous three weeks, and $1.0 million (+38.9%) higher amongst Accommodation merchants.

ENDS

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