Grocery and liquor retailing lift NZ credit, debit card spending in April
New Zealand retail spending on electronic cards rose in April on higher consumption of groceries and liquor, adding to expectations the central bank will signal an earlier interest rate increase at Thursday's review than previously forecast.
Retail spending on credit and debit cards rose a seasonally adjusted 1.1 percent last month, following a 0.3 percent decline in March and a 0.6 percent decline in February, Statistics New Zealand said.
"The rise in retail card spending in April was driven by a record increase in grocery and liquor spending, which follows flat March and February months," business indicators senior manager Neil Kelly said. "This was the largest increase in grocery and liquor spending since the series began."
The Reserve Bank is widely expected to keep rates on hold at 1.75 percent on Thursday but economists are expecting it to rejig its forecasts to show rate increases coming sooner than its previous forecast of late 2019 as inflation pressures begin to emerge. It's keeping a close watch on consumer spending, amid concerns people are more willing to fund retail purchases with debt, and today's figures show credit cards accounted for 48.8 percent of transactions, down from 49.7 percent in March, though still up from 45.7 percent a year earlier.
Spending rose in three of the six retail industries in April, the government department said. The largest movements were consumables, with spending up 2.2 percent, and durables, up 1.3 percent. Hospitality spending rose 0.7 percent while apparel spending fell 1.2 percent.
The figures show core retail spending, which excludes vehicle-related industries, rose 1.4 percent in April. Core retail spending was flat in March.
Of the non-retail industries, non-retail excluding services advanced 0.4 percent from March while spending in the services industry rose 0.1 percent.
Actual retail spending climbed 4.5 percent on the year to $5 billion in April.
Card-holders made 134 million transactions in April versus 143 million in March. The average value was $49, unchanged from the prior month.