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Discretionary spending increases

Fuseworks Media
Fuseworks Media

Figures released today by Paymark, which processes around 75% of all electronic transactions in New Zealand, show that Kiwis spent a total of just over $4.6 billion in December via Paymark's network, pushing the annual growth rate up slightly to 3.4 per cent.

Those to benefit from the increase in discretionary spending around the country during December included footwear (+ 9.2 per cent year-on-year) and clothing outlets (+5.3 per cent year-on-year).

It also looks as though Kiwis splashed out on DIY and general building projects in December, with growth in the wider building and home improvement sectors up 5.0 per cent for the month - the strongest growth recorded in the last year.

Robinson says while the growth rates are still modest and patchy, and the risks of global financial influences are very real, there was a positive note to the end of year figures.

"The Christmas spending boom was again stronger than last year, with one major change - the peak shopping day did not fall on Christmas Eve, but on Friday the 23rd. This shows us that Kiwis definitely used the whole of the last week to prepare. Signs of more discretionary spending bode well for the future even if the trend is patchy across sectors and across regions at present," says Robinson.

By region, annual spending growth through Paymark was strongest in Palmerston North (+7.7 per cent), South Canterbury (+6.9 per cent), Southland (+6.5 per cent), Otago (+5.4 per cent) and Auckland/Northland (+5.2 per cent).

Weak annual growth rates were recorded in Canterbury (-0.9 per cent), Marlborough

(-0.8 per cent) and Wanganui (-0.7 per cent).

When looking at 2011 as a whole, the Paymark network processed 904 million transactions (up 2.9 per cent on 2010) worth a total of $45 billion (up 3.9 per cent on spending in 2010).

The average size of transactions excluding fuel and supermarkets during 2011 was $50.89, down 2 per cent on 2010.

Another pattern that came through during 2011 was how Kiwis are paying for goods and services - debit cards remained the dominant payment type with 701 million transactions, but the growth rate amongst debit cards decelerated to 3.6 per cent.

In contrast, credit card usage, which had grown only 0.2 per cent in 2010 did accelerate to 0.7 per cent in 2011 and by December was growing faster than debit card usage.

"2011 was a tough year for retailers, with all kinds of local and global factors affecting business - it is encouraging to see a bit of positivity with higher discretionary spending in the latter part of the year. We hope this is a sign of better things to come in 2012", concludes Robinson.

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