Kiwis saving for Santa?
Retailers may not be in for the expected sales boom ahead of the GST hike in October.
According to the latest Fly Buys consumer spending intentions survey, Kiwis are planning to save more and spend less over the next quarter.
Thirty-nine percent said they are planning to save more than the previous three months, with one in four (26%) intending to put money either toward a bank term deposit or into KiwiSaver and other superannuation schemes.
Fly Buys head Lance Walker told the National Business Review that while there have been predictions shoppers are going to splash out on big ticket items before the GST rise, research indicates that may not be the case.
“Half of all Kiwis aren’t planning on buying a big item; for those who are 17% plan on buying a computer or home entertainment system, 10% a car, 7% whiteware and 5% property.
“We thought we would see more intention to spend given the GST change and, as the recession starts to ease, people are having a bit more money in their pocket, but in fact it looks like the intentions to spend are quite similar during the [last] two quarters, he said.
“The one that has changed is the intention to perhaps use some of that money that may be coming back into pockets more wisely than in the past and look into maybe saving.”
Mr Walker said it is likely saving more was a habit people adopted during and after a recession.
“[Now] people are more wary and conservative in their spending habits.”
The survey also showed Kiwis were staying away from investing money into finance companies, with 100% saying they are not planning to do so in the next quarter.
Retail, including restaurants and hairdressing salons, seems to be the hardest-hit area where people intend to spend less over the next three months.
Thirty percent of respondents said they are planning to cut spending on eating out, socialising and entertainment; 34% said they would be spending on electrical goods and technology; 27%- on CDs, DVDs, books and magazines and 24% on personal grooming.
But Mr Walker said it is hard to judge whether the saving intentions are here to stay, as since it was in the pre-Christmas quarter people might be saving for a big spend closer to the holiday season.