Kiwibank Data Reveals Green Shoots And Kiwi Spending Shifts

• New research from Kiwibank's electronic cards in November revealed Kiwi consumers embraced Black Friday, with an encouraging year-on-year volume increase in retail spending.

• The volume of core retail spending rose 4% compared to last year, driven by earlier than-ever discounts and improving economic conditions.

• The data also indicated Kiwi increasingly prioritise experiences over possessions in their spending habits.

After a challenging year for household balance sheets, New Zealanders are beginning to reopen their wallets cautiously. New data from Kiwibank reveals a compelling story behind the country's evolving spending habits, marked by a modest recovery in retail spending and a rising preference for experiences over material goods.

"After a tough 12 months, it would seem Kiwi are finding a bit of breathing room and an increased appetite for spending," says Mary Jo Vergara, Senior Economist at Kiwibank. "It's still early days, but the numbers tell a story of optimism. Shoppers are cautious but ready to spend."

Black Friday 2024: Bargains Abound

The annual Black Friday frenzy has firmly cemented itself in Aotearoa's retail calendar. This year's data shows a 4% increase in the volume of core retail transactions compared to 2023. Yet, while there was an increase in volume, the total value of spending dropped by 2.5%. Value per transaction is 6.2% cheaper than last year.

Advertisement - scroll to continue reading

"Looking at Kiwibank’s electronic card spend, we’ve seen an encouraging improvement in consumer spending. Last year, households had little appetite to spend, but the tide is slowly turning. Retailers have been discounting heavily to get people through the door, which seems to be working."

Compared to a year ago, the average spend for key retail categories changed as follows: • Department stores: -5%

• Clothing and footwear: -0.9%

• Home contents and furnishings: -14.6%

• Home electronics: -4.2%

• Stationery & books: -0.1%

• Pharmacy: 3.1%.

“Pharmacies are an interesting case,” Vergara notes. “They’re not just about prescriptions anymore. Whether it’s a winter scarf or a summer lipstick, they’re stocking more than just pharmaceutical products, which is resonating with shoppers.”

Boxing Day: Still the Heavyweight Champion

Despite Black Friday’s growing popularity, Boxing Day remains the unrivalled leader in retail activity. In 2023, nearly 20% of all December transactions occurred in the final five days of the

year. This post-Christmas shopping spree dwarfs Black Friday’s impact, showcasing the enduring appeal of Boxing Day sales.

"Black Friday kicks off the holiday spend period, but Boxing Day is the reigning pound for pound spending champ. By both value and volume of spending, Boxing Day is the biggest and busiest shopping day of the year, and we expect to see this trend continue this year."

From Material to Memorable: I Am (Not) a Material Girl

Beyond traditional retail, Kiwi are showing a growing preference for experiences over material goods. Spending on dining, entertainment, and travel has surged, with an uptick in sporting entertainment (+38.2%), flight bookings (+18.5%), and recreational accommodation (+11%) over the past two years.

“Spend on ‘experiences’ has grown on average 7% over the last two years. Kiwi are choosing to create memories rather than accumulate possessions,” says Vergara. “After the pandemic-induced splurge on goods like pizza ovens and pools, Kiwi are returning to restaurants, booking holidays, and packing stadiums for concerts or sports games.”

The report strikes a cautiously optimistic tone for the year ahead. Falling interest rates and a recovering housing market are expected to boost household spending, particularly as inflation continues to ease.

However, challenges remain. Rising unemployment and job insecurity could weigh on the recovery’s pace. “The labour market lags the broader economy, so we’re still seeing the effects of the past two years of slow growth,” Vergara cautions. “But even with these clouds on the horizon, the signs of recovery are there - they’re just coming through slowly.”

“As Kiwi continue to navigate economic recovery and spending, one thing is clear: Black Friday may be the starting whistle, but the holiday shopping season still belongs to Boxing Day - and increasingly, to experiences.”

About Kiwibank

Kiwibank is a Purpose-led organisation that has modern, Kiwi values at heart and keeps Kiwi money where it belongs – right here in New Zealand. As a Kiwi bank, with more than a million customers, our trusted experts are focused on supporting Kiwi with their home ownership aspirations and backing local business ambitions, so together we can thrive here in Aotearoa and on the world stage. Kiwibank is the #1 bank in Kantar’s 2024 Corporate Reputation Index and the only bank in the top 20.

© Scoop Media