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Credit spending, debit cards rises in October, led by durable sales

New Zealanders increased their spending on debit and credit cards in October, with buying across all retail sectors rising, led by a boost in durables.

Suze Metherell
Tue, 11 Nov 2014

New Zealanders increased their spending on debit and credit cards in October, with buying across all retail sectors rising, led by a boost in durables.

The value of core retail sales on electronic cards, which strips out spending on fuel and vehicle related items, rose 1.1 percent, its biggest gain since February, to a seasonally adjusted $3.8 billion in October from September when it fell 0.4 percent, Statistics New Zealand said. Including fuel and vehicle spending, total retail spending increased 1 percent to $4.7 billion. (See graph below)

Credit and debit spending on durables, the second largest measure in the series, climbed 2.1 percent to $1.1 billion, paced by consumables, which includes groceries, which advanced 0.9 percent to $1.6 billion. Apparel spending rose 0.8 percent to $289 million, while hospitality spending increased 0.5 percent to $750 million.

New Zealanders fuel purchases on electronic cards rose 2.2 percent to $775 million, snapping the previous three consecutive months of declines, while spending on vehicles rose 0.2 percent to $135 million.

Total spending, which includes non-retail industries and services, rose 1.5 percent in October to $6.3 billion.

"Spending rose in all six retail industries during October, the first time this has occurred since May 2014," business indicators manager Neil Kelly said."Trend for the total, retail and core retail series have all generally been rising since these series began in October 2002."

Today's figures come after Visa Inc's local unit last week said it has seen a trebling in the use of contactless card transactions over the past year, as people become more comfortable with the new way of paying for small items in a strong domestic market. Local consumers made 3.2 million transactions using Visa's contactless payWave technology in September, the most since the technology, which lets a purchase be made without swiping a credit or debit card through a terminal, was launched in 2011, and more than three times the level it was last year, according to the New Zealand arm of the global payments company.

On an unadjusted basis, core retail spending rose 6 percent from the same month the previous year to $3.9 billion, with hospitality surging 11 percent to $764 million, durables climbing 4.8 percent to $1.2 billion and consumables rising 5.6 percent to $1.7 billion. Apparel rose 0.5 percent in the year to $764 million. Total retail sales rose 5.7 percent in the year to $4.8 billion. Total spend rose 5.9 percent to $6.4 billion.

The number of core retail transactions rose 7 percent from October a year earlier, to 92 million, and was up 6.8 percent across all industries to 124 million. The average value per transaction was unchanged at $51.

Spending on debit cards made up 55.1 percent of total transactions, down from 55.4 percent in September and 55.8 percent in October the previous year.

Value of retail electronic card transactions monthly (Source: NZ Stats) (Click to zoom)

(BusinessDesk)

Suze Metherell
Tue, 11 Nov 2014
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Credit spending, debit cards rises in October, led by durable sales
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