Building up to Easter

This Easter's surge was strong amongst food and liquor suppliers (i.e. the supermarkets etc rather than the cafes and bars) but also amongst hardware and appliance stores. Photo MiNDFOOD
This Easter’s surge was strong amongst food and liquor suppliers (i.e. the supermarkets etc rather than the cafes and bars) but also amongst hardware and appliance stores. Photo MiNDFOOD

More building activity and Easter spending combined to boost spending in March.

Spending nationally through Paymark was $5,266 million in March, up in underlying terms by 5.7 per cent since March 2017 and up 0.6 per cent in seasonally-adjusted terms since February 2018.

Both figures point to a pick-up on recent months, an effect that is more noticeable outside the three largest regions.

The highest annual underlying growth rates were recorded by merchants in Marlborough (17.6 per cent), which includes Kaikoura in the Paymark statistics, Wairarapa (+15.3 per cent), Wanganui (+11.8 per cent) and Gisborne (+11.2 per cent).

Slow growth was experienced in Nelson (+3.2 per cent), Auckland/Northland (3.7 per cent) and Canterbury (+4.2 per cent).

The total number of transactions during the month totalled 113.5m (up an underlying 6.5 per cent on March 2017) , made up of credit cards, charge cards and contactless cards amounting to 44.3m (up 19.4 per cent) and bank and credit card company debit cards of 69.1m (down 0.5 per cent). This continues the shift away from proprietary debit cards which offer lower merchant fees.

Returning to the value of spending, two specific factors contributed to annual spending growth in March.

First there was a pick-up in spending at merchants supplying the housing sector. The annual growth rate in March of 8.3 per cent was well above the average 3.6 per cent of the previous six months.

This pick-up was strongest amongst hardware/building suppliers and appliance stores and within regions around the centre of the North Island (Waikato, Gisborne, Hawkes Bay, Wairarapa, Palmerston North and Wanganui) and the top of the South Island (Nelson, Marlborough).

The second factor was more accommodation spending, both in the early weeks of March and then also around Easter. The fall of Easter this year outside of the school holidays provides an opportunity to measure the effect of the Easter holiday.

Consistent with the traffic flows many people experienced, the Easter effect shows as a shift in spending away from the major urban centres to the surrounding regions.

Grouping Auckland/Northland, Wellington and Canterbury together as the “large regions” and rest as the “other regions” reveals the following statistics.

Initially there is a build-up spending across the core retail sector across all regions. Compared to Wednesday March 29, 2017, a day that did not precede Easter, core retail spending on Wednesday March 28, 2018 was up 23.8 per cent in the large regions and up 26.5 per cent in the other regions.

This surge was strong amongst food and liquor suppliers (i.e. the supermarkets etc rather than the cafes and bars) but also amongst hardware and appliance stores.

The spending surge was even stronger on Thursday, more so outside the large regions, with core retail spending up 51.6 per cent in the large regions and 66 per cent in other regions.

Over the six days Wednesday to Monday, core retail spending declined by $7.5m, or 1.9 per cent, in the large regions, compared to the same (non-Easter) days in 2017, and increased by $36.7m, or 14.8 per cent, in the other regions.

The key recipients of the extra spending in the other regions were merchants in the food and liquor sector (up $14.7m) and in the hospitality sector (up $18.7m), the latter including accommodation providers and bars and cafes.