Figures released by Paymark, which processes 75% of all electronic transactions in New Zealand, show that the value of transactions processed during December 2010 increased 3.9%, year-on-year. While this was slower than the growth rate seen in November, it was ahead of the 2.8% growth rate (averaged) across the first 10 months of the year.
Paymark head of sales and marketing, Paul Whiston says that despite a surge in spending at the very beginning of December, the increase in spending is reflective of modest, but improving growth across the general retail sector in recent months.
He adds that once the impact of the two largest sectors (petrol and supermarkets) is taken out of the equation, the performance of the general retail sector becomes even clearer.
“After taking petrol and supermarkets out for the month of December, we see that spending on more discretionary items rose by 2.7% year-on-year; earlier in the year this measure of spending was only rising at a rate of 0.8% pa.
“During December, people have been increasing their spend on takeaways (+ 24%), general food/liquor (+7%) and at restaurants/cafes (+7%) – we dined well this holiday season,” says Whiston.
By region, retailers in South Canterbury, Gisborne and Waikato fared well during December, with year-on-year increases of 6%, 6% and 5% respectively.
Festive growth was not experienced as much on the West Coast where spending through Paymark declined 2%.
Nationally, the number of card transactions for the month was 4.2% higher than the same month last year, and the debit/credit spending pattern has continued, with debit usage up 5.9% and credit card usage down 0.8%.
Whiston says that this is another indicator that people remain cautious about spending and are making smaller purchases, using only money that they have rather than getting into more debt.
“While the increase in activity towards the back-end of 2010 would have been an encouraging way for retailers to end the year, the situation remains one where the near-term should be approached with caution,” concludes Whiston.
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