Retail sales surge on Rugby World Cup but caution urged

Retail sales surged on the back of the Rugby World Cup.

Both total sales and volumes rose above the 2% mark, with sale values increasing 2.1% in the September quarter and sale volumes rising 2.2%.

That is double the average market forecast and is the largest quarterly rise since December 2006, at the height of the mid-decade debt binge.

The rise, although good news for the country’s battered retail sector, should be put in context. This is just a quarterly increase, albeit a very good one.

But the much-discussed “rebalancing” of the economy away from spending and towards exports can be seen in the long-term retail figures.

The latest result shows the level of retail sales per head of population was $3847 per head of population for the quarter.

That is still 5.6% below $4077 retail sales per head per quarter at the peak of the boom, in March 2007.

The 80,000 Rugby World Cup tourists seem to have driven these figures, and the next couple of quarters will be more telling than this – admittedly welcome – one-off increase.

The South Island has done particularly well, with the total value of retail sales south of Cook Strait rising by the highest level ever, 3.6% or $1248 million for the quarter.

A combination of the Rugby World Cup, a late start to the ski season, and later school holidays seem to have affected this result, says industry and labour statistics manager for Statistics New Zealand, Louise Holmes-Oliver.

Accommodation sales countrywide rose 8.7%, or $56 million – the largest quarterly rise since the series began.

There is also a record increase for supermarket and grocery store sales, up 4.1% or $176 million. Statistics New Zealand reports that a number of its supermarket respondents commented on the notable number of RWC-related tourists going through their checkouts.

The only sectors which showed decreases in sale values were fuel retailing, where a drop in petrol prices saw a 3% drop ($56 million), and furniture, floor coverings, houseware and textiles, which saw a 5.2% ($23 million) drop.