New Zealand#39;s Retail Sales Growth Slows to 0.1% (Update3)
New Zealand;s Retail Sales Growth Slows to 0.1% (Update3)
By Tracy Withers
Feb. 15 (Bloomberg) — New Zealand;s retail sales growth
slowed in December as record-high interest rates and more expensive
fuel and food crimped consumer spending.
Retail sales rose 0.1 percent from November when they
increased a revised 1.7 percent, seasonally adjusted, Statistics
New Zealand said in Wellington today. The gain matched the median
estimate in a Bloomberg News survey of 11 economists.
Reserve Bank Governor Alan Bollard raised the benchmark
interest rate four times last year to 8.25 percent to curb demand
and combat inflation. Companies such as Warehouse Group Ltd., the
nation;s largest publicly traded retailer, said sales in the
Christmas gift-buying season were flat, adding to signs Bollard
won;t raise borrowing costs again.
“The outlook for the retail sector is somber,;; said
Shamubeel Eaqub, an economist at Goldman Sachs JBWere Ltd. in
Auckland. “The weakness in the survey suggests demand in the
real economy has been slowing more quickly than the Reserve Bank
expected. We continue to look for the bank moving to a more neutral
bias over coming months.;;
New Zealand;s dollar fell to 78.56 U.S. cents at 5 p.m. in
Wellington from 78.80 cents immediately before the report.
Fourth-quarter sales excluding inflation, a measure of
volumes, rose 0.3 percent, half the pace expected by economists.
Eaqub expects Bollard will cut rates as early as June. In all,
6 of 15 economists surveyed by Bloomberg News forecast a rate
reduction this year. Eight predict borrowing costs will be
unchanged and one expects an increase.
Consumer confidence fell to an 18-month low in the fourth
quarter, according to an index calculated by Westpac Banking Corp.
and McDermott Miller Ltd. A net 20 percent of consumers said the
economy would improve over the next five years, the lowest reading
in 17 years, Westpac said.
Curbing consumer spending, home-loan costs have jumped while
the price of gasoline and food has accelerated, leaving less money
for discretionary goods.
The interest rate on a two-year fixed mortgage was 9.38
percent in December, up from 8.18 percent a year earlier, according
to central bank figures.
Gasoline prices jumped 20 percent in December from a year
earlier, according to the government. Food prices rose 5.4 percent,
led by poultry and butter.
Warehouse Group Ltd. said last month that sales for November
and December were “relatively flat;; from a year earlier because
of slowing spending on televisions and appliances.
Department Stores
Hallenstein Glasson Holdings Ltd., the nation;s third-biggest
retailer, said last month that pre-Christmas sales were “patchy;;
and revenue from its clothing stores for the 22 weeks ended Jan. 20
fell 2 percent from a year earlier.
Retail sales rose in December at 13 of the 24 store categories,
the statistics agency said. Sales by fuel outlets and department
stores made the biggest contribution to the increase.
Sales by fuel outlets gained 2.7 percent from November as
prices increased. Vehicle dealer sales fell 2.4 percent.
Core retail sales, excluding gasoline, auto dealers and
workshops, rose 0.3 percent from November when they gained a
revised 0.8 percent.
Supermarket and grocery sales, which make up a fifth of all
retailing, were unchanged in December. Department stores sales
gained 3.1 percent while sales by appliance stores, shoe shops,
bars and clubs also increased. Cafes, restaurants and hardware
stores had lower sales.
Clothing, Fuel
Retail sales excluding inflation rose 0.3 percent in the
fourth quarter after gaining 0.2 percent in the three months to
September, the agency said. Economists expected a 0.6 percent
increase.
Clothing, appliances, vehicles and fuel made the largest
contribution to the increase in quarterly sales volumes. Fuel
volumes rose 3 percent, of which 2 percentage points reflected new
sourcing of data, statistics officials said.
Supermarket and grocery sales volumes fell for the first time
since the second quarter of 2004. Purchases from furniture stores
and accommodation outlets also declined.
Excluding vehicle dealers, fuel outlets and workshops, core
sales volumes were unchanged from the third quarter when they
increased 0.1 percent.
To contact the reporter on this story:
Tracy Withers in Wellington at
