Spending figures reveal pre-GST bonanza

Kiwis went on a last-minute shopping spree on the eve of the GST hike but it wasn’t enough to give much of a boost to overall spending numbers in September.

New figures from Paymark show New Zealanders pushed an extra $35.8 million through retailers’ registers last Thursday, compared to the same day last year.

Almost all sectors benefited from the pre-GST rush, but it comes as no surprise that the largest increases were felt in petrol stations (up by 44%) and supermarket outlets (up by 33%) which, combined, took in an extra $14 million on the day.

With summer on the way, the pre-GST spend-up provided builders/home renovators and DIY enthusiasts with the perfect excuse to purchase materials - building suppliers were up 145%, and hardware suppliers up 207%.

Despite experiencing a slow few days prior to Thursday, travel agents were up 46% and electronics stores experienced an 89% increase.

The petrol, supermarket, building, hardware, travel and electronics sectors accounted for approximately 75% of Thursday’s total cash injection, with remaining sectors enjoying an average 12% increase.

Paymark head of sales and marketing, Paul Whiston, said although the spending rush was late, it provided retailers with a welcome cash bonus late in the year.

“Our figures show that whilst the build-up occurred over a few days prior to October 1, Kiwis waited until the last minute to take advantage of sales and pre-GST prices,” Mr Whiston said.

“Once they got out to the shops on Thursday they made the most of the lower prices and it’s pleasing to see that most retailers across the country experienced significant gains. Palmerston North experienced the biggest surge on the day, up 45.9%,” he added.

However, the one-day spending spree had little effect on overall performance in September, with transactional volume across the country steady at 4%, and value up 3.6% year-on-year.

“Despite the extra dollars pushed through our network on Thursday last week, September remained relatively flat throughout the country. The majority of regions are experiencing mixed growth patterns, which we have seen a lot of this year,” concludes Whiston.

By region, Gisborne, South Canterbury and Palmerston North experienced the largest gains in terms of value, increasing 7.0%, 9.9% and 9.7% year-on-year, respectively.