New look Father’s Day caps off mixed bag for August spending

New look Father’s Day caps off mixed bag for August spending

6 September, 2016

Father’s Day gifts appear to have changed somewhat over the years, if this year’s spending patterns on the Paymark network are anything to go by.

Dads received the traditional books and sports equipment with both categories rising in the four days leading into Father’s Day when compared with the previous week. But spending on flowers was up – more so than car accessories which might suggest a change in the way we celebrate fatherhood.

Figure 1: Spending within selected sectors through Paymark over recent 4-day periods

Overall, spending declined in August according to Paymark figures, once seasonal effects are taken into account. However it will take several more weeks to determine whether the spending momentum has slowed or instead whether we were simply pre-occupied with the Olympic Games or other distractions during the month.

The value of underlying spending that passed through the Paymark network decreased 0.8% in seasonally adjusted terms between July and August. Partly this was due to lower spending on fuel but there were also declines amongst other sectors.

Relative to the same month last year, underlying spending was up 4.8% across New Zealand. This is below the 7.4% rate averaged over the first six months of 2016.

A hint that the slowdown may not represent a general change in growth momentum comes from the mixed nature of the regional figures. The annual underlying spending growth rate declined in seven of the 17 regions monitored by Paymark, including the major centres. However, the annual growth rate increased in the other ten regions, including in Gisborne (spending up 9.3% Aug-to-Aug) and Bay of Plenty (+8.9%), the two fastest growing regions, and in Nelson (-0.3%) and West Coast (+0.6%), the two slowest growing regions.

Figure 2: Paymark All Cards data (August 2016 versus August 2015)

A similar mixed situation emerges when looking across sectors within the month. The weekly profile of the annual underlying spending growth rate shows slow growth during the two weeks of the Olympic Games. However there were periods before the Games when annual growth has also been low recently. The pattern was not consistent across retail sectors.

Figure 3: Annual growth rate per week of underlying spending through Paymark

For example, there was slower growth amongst housing-related retailers during August but this slowdown did not correspond to the Olympic Games.

Figure 4: Annual growth rate per week of underlying Housing-related spending through Paymark

Elsewhere the annual growth rate remains stong, such as amongst hospitality merchants. After the volatility during July arising from the change in school holidays dates between 2015 and 2016, the underlying spending growth rate has been strong amongst merchants providing foods and beverage services (e.g. cafes).

Figure 5: Annual growth rate per week of underlying Food/Beverage Services spending through Paymark

The end result is a slower month of August overall but inconsistent patterns across regions, sectors and time.

ENDS

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