Pre-Christmas Spending Heating up

Pre-Christmas Spending Heating up

Three patterns stand out from pre-Christmas spending to date: there have been some exceptionally busy days; overall spending growth is higher than in earlier months of the year but Auckland is lagging behind the rest.

Black Friday was much busier this year than in 2016 but the growth rate recorded Thursday 7 December was even higher for Core Retail merchants. Paymark recorded 14.5% more underlying spending through Core Retail merchants than on the same Thursday in 2016. The equivalent Black Friday growth rate had been 14.3%. Both days were busy but spending on food and liquor took on more prominence last Thursday. Also up strongly on Thursday were Supermarkets, Department stores, Toy/game shops, and Hardware outlets.

Over the last week, spending across all Paymark merchants was $1351.7 million. Underlying growth was 7.8% when compared to the 4-10th December in 2016. This growth rate is slightly lower than the annual underlying growth of 8.0% in the previous week and 8.3% three weeks ago but all three weeks are above the average of the first ten months of this year.

Spending is thus increasing as we approach Christmas but doing so at a faster rate than 2017 growth patterns to date. This dual pre-Christmas acceleration shows as the ratio of recent spending to the January-October average being higher than the pre-Christmas ratio last year. In the latest 7 days, underlying spending has been 119% of the Jan-Oct average (i.e. 19% above Jan-Oct average) whereas this time last year the ratio was 117%.

While all regions will face even stronger spending in the last two weeks before Christmas Day, the pre-Christmas pattern to date suggests the smaller regions will benefit the most. Highest spending growth last week was recorded in Marlborough, which includes Kaikoura in Paymark figures, marking a welcome change from the earthquake-affected experience of 2016.

The other four smallest regions – in terms of spending through Paymark – of Wairarapa, West Coast, Gisborne and Wanganui also recorded high spending growth. In contrast, the lowest growth rate lately has been in the largest regions of Auckland/Northland, Canterbury and Wellington.

ENDS

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