From Material To Memorable: Beyond Black Friday

• Black Friday has grown in popularity in Aotearoa. And with each year, the deals and discounts seemed to be advertised earlier and earlier. According to Kiwibank electronic card transactions, the volume of retail spend rose 4.4%, while the dollar spend declined 2.5%. Best put, the value per transaction in November was down 6.2% compared to last year. For a change, we’re spending less and getting more.
• Beyond the usual ups and downs in spend in any given year, underlying consumer behaviour is shifting. Kiwi want experiences over physical products. We overconsumed over covid. But now we prefer buying concerts over Converse and coffee over couches.
• Household balance sheets have come under significant pressure over the last few years. Consumer confidence is low and consumption weak. But the outlook for spending in 2025 is slowly improving. First, it’s about bringing balance sheets back to baseline. The change in interest rates and expected rise in house prices should improve the financial position of the household sector. Second, the cost-of-living crisis has ended, and income growth will outstrip inflation.

Add to cart: Breaking down Black Friday.

Spam in inboxes, posters in storefronts, and flooded social media feeds – Over the last decade or so, Black Friday has grown in popularity in Aotearoa. What began in the United States, has gone global with many Kiwi retailers jumping on the bandwagon. The ‘unbeatable’ sales seemed to spring up everywhere you looked. The last Friday of November is officially the date. But with each year, the deals and discounts seemed to be advertised earlier and earlier. For some the day lasted a week. While for others, the bargains began not long after the witch hats and black cats of Halloween were packed away.

We trawled through Kiwibank electronic card transactions and uncovered an encouraging improvement in consumer spending. Last year, households had little appetite to spend. The number of core retail (excluding hospitality and food) transactions declined almost 5%. However, 12 months and a couple of interest rate cuts later, the appetite and ability to spend is recovering – slowly. The volume of core retail spend rose 4% on last year’s levels. Black Friday discounting and a slowdown in consumer price inflation resulted in a 2.5% decline in the nominal value of spend. Better put, the value per transaction is 6.2% cheaper than last year.

By sub-categories, all things home recorded the deepest decline in average spend. Home contents and furnishings recorded a 14.6% fall, while home electronics were down 4.2%. The average spend at department stores was down 5%. Interestingly, the average spend at pharmacy stores rose 3.1%. The increase is largely due to the reintroduction of the $5 prescription fee in July 2024. The value of transactions at the pharmacy jumped 128% from November last year. We thought to exclude spend at pharmacies. But shops like Unichem, Life Pharmacy and (chaotic) Chemist Warehouse stock more than just pharmaceutical products. Some of the best winter scarves, summer sunnies, and cosmetics lie inconspicuously on shelves at your local pharmacy (thank me later).

This year’s Black Friday experience suggests that Kiwi are now spending less and getting more. It follows a period where the rise in inflation eroded the purchasing power of our hard-earned dollar – we were spending more and getting less. But we’ve returned to more stable price growth, and even deflation in parts. Indeed, the evolving trend may also be a function of changing consumer patterns. In recent times, our household imports of low-value goods have skyrocketed, up 40% in the last year. The retail landscape is shifting, with the likes of Temu – the Chinese online shopping behemoth – entering the market.

© Scoop Media