By Tracy Withers
Jan. 6 (Bloomberg) -- New Zealand’s consumer spending rose in December from a year earlier after a surge in transactions in the final week of the month as retailers slashed prices to attract customers.
The value of spending rose 2.6 percent last month to a record NZ$4.04 billion ($2.4 billion), Electronic Transaction Services Ltd., an Auckland-based company whose system handles 75 percent of all spending, said in an e-mailed statement today.
The sales increase was about one-third of the pace recorded in December 2007 as New Zealand slumped into its worst recession in 10 years and companies fired workers. Still, spending surged 10 percent in the final 10 days of last month as consumers chased bargains amid discounting by many stores from Dec. 26.
“While 2.6 percent is a fairly slow increase for December, New Zealanders still managed to spend more despite the current economic climate,” said Paul Whiston, head of sales at Electronic Transaction Services. Spending in the three weeks ended Dec. 21 was less than a year earlier.
Supermarkets and food retailers posted strong increases in sales while travel and tourism transactions slowed, the company said, without providing more details. The government publishes official figures for credit and debit card spending in December on Jan. 22 and retail-sales statistics for the month on Feb. 13.
Many retailers rely on spending in the Christmas period and early January to buoy profits. Warehouse Group Ltd., the nation’s biggest discount retailer, gets about 40 percent of operating earnings from its general merchandise stores in December and January.
Auckland-based Warehouse today said sales in the 10 weeks ended Jan. 4 fell 2.5 percent from a year earlier.
“The outlook remains uncertain as overall consumer spending is expected to remain weak,” Chief Executive Officer Ian Morrice said in a statement to the stock exchange.
To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.
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