Retail NZ unsurprised by Christmas spending decline

Thursday, 26 December 2024, 3:57 pm
Article: RNZ

Lucy Xia
25 December 2024

Retail NZ's chief executive said she is unsurprised by the continued decline on retail spending during Christmas, which she said is a reflection of how households are struggling in the current economy.

Data released on Tuesday by payments company Worldline showed Christmas Eve was the busiest shopping day of the year for New Zealand, with 607,299 sales recorded on its network between 12pm and 1pm.

However, the peak number of transactions is the lowest of the past six years, and well below the record of 679,436 in 2019, pre-pandemic.

Retail NZ chief executive Carolyn Young said the country is a long way away from the highs of 2020 and 2019.

"It did continue to show us that we're 3 percent down on average, compared to last year, which was also down on the year before, and down on the year before, so, we have continued to see that slide," she said.

"We haven't got back up to those peaks from 2020, and it does confirm how trading has been."

Young said people are spending more in areas like fashion and sports equipment, but there are less sales in home decorations and larger home appliances.

She said Worldline spending data from the first few weeks of December showed that the regions had stronger spending than cities.

She said areas like Wairarapa, parts of South Canterbury, Otago, Whanganui, Hawke's Bay and Gisborne showed growth of up to 5 percent, but Auckland and Wellington saw declines of up to 1 percent.

Young said it reflects the wider economy and how households are struggling, particularly in cities like Auckland where people are facing bigger mortgages.

"Some of those numbers in those big centres dragged the whole sector down to that minus 3 percent year on year"

"We do know obviously that the cities have really struggled in terms of business closures and redundancies, people really feeling the effects of the economy, especially obviously in the Wellington region with the government sector and wider areas that are impacted by that.

"And Auckland hasn't been immune from a number of restructures and redundancies as well," she said.

Young said her expectations were "mildly tempered" for Boxing Day, as many stores had started pre-boxing day sales to attract customers.

She said the period between Black Friday and Boxing Day would have a flattening effect and spread out the total spend over December.

Young said it has been a tough year for retailers, and everyone has their fingers crossed in the hope that New Zealand will come out of the recession early next year.

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