14 Nov 2011

Retail spending boosted by Cup

7:55 pm on 14 November 2011

Retail spending has risen sharply, boosted by the Rugby World Cup.

Figures issued by Statistics New Zealand show retail spending volumes rose a seasonally-adjusted 2.2% in the three months to the end of September, the largest quarterly increase since December 2006.

Statistics NZ says the 80,000 people who visited for the Rugby World Cup are likely to have boosted spending.

Sales rose across almost all retail branches, with supermarkets and accommodation leading the way, followed by pharmaceuticals, food and drinks. Shoppers spent $17.3 billion.

The value of spending rose 2.1% in the quarter.

New Zealand Retailers Association chief executive John Albertson says the tournament has been a godsend for retailers and he expects the afterglow to last until the December quarter.

The figure surprised a number of commentators.

BNZ chief economist Tony Alexander told Checkpoint the figure was "at least double, if not triple" what the market expectation was for the quarter, meaning economists were now "scrambling around" trying to find exact answers as to why that should be.

He says the big increase in spending was at supermarkets - up 3.8% for the quarter compared with the average quarterly increase of around 0.5% and that was directly attributable to the Rugby World Cup.

He warns against using the figures to say there has been a revival in retail spending in New Zealand.

UBS senior economist Robin Clements told evening business on Checkpoint there was also a bounceback in sales in Canterbury, with several supermarkets and a mall reopening in Christchurch.

"The interesting thing is, why did we not pick it up? We knew the visitors had arrived and it always seemed a bit perplexing that the data that we were seeing didn't seem to show much of a boost - and now it's there."

He says the electronic card transaction data doesn't show if visitors pre-pay or use a debit card, cash or internet banking.

"It's one of the prices we pay for having lost the monthly retail sales numbers, thanks to budget cuts."