PRESS RELEASE: Paymark
Christmas is fast approaching and the shopping rush is starting to build. The pre-Christmas build-up starts gradually in November and climbs to a frenzy of activity in the last few days.
Based on 2006, when Christmas Day last fell on a Monday, the busiest shopping day is likely to be the Friday before Christmas this year (23 December), as was the case in 2016 as well.
But generally the entire last week is busy. Taking insights from Paymark’s 2016 records, national spending is likely to rise to 156% of the weekly average of the first ten months of the year. The frenzy is relatively more in the regions, including in Gisborne (173%), Hawke’s Bay (171%) and Nelson (167%) in 2016. By way of contrast, while still busy, the last week before Christmas in Wellington was only 49% above average in 2016.
The build-up traditionally starts in November and while New Zealand might not experience the rush of the US Black Friday (24 November this year), spending is likely to jump by about 10% around this time of year and then continue to rise towards Christmas, judging by previous patterns seen through the Paymark network.
Paymark figures for 2016, when Christmas Day was last on a Sunday, show spending in weeks that ended on a Saturday in early November being around 105% of the weekly average of the first ten months of the year, then jumping to 115% in the fourth week and eventually rising to the 156% in the week immediately before Christmas.
Looking at recent figures, the regions have also been to the fore in recent weeks. Spending through Paymark totalled $5.0 billion in October. On an underlying basis, the annual growth rate was 4.3% and the seasonally adjusted monthly growth rate was 0.6%. One dampening factor on the annual growth rate was the occurrence of five Sundays in October this year which helps spread the growth over an extra week.
Highest annual spending growth during September was in West Coast (10.2%), a sharp turnaround from the previous month, with all other regions also reporting growth above the national average for the month. The lowest underlying annual growth rates were in Auckland/Northland (+2.0%), Canterbury (+2.5%) and Wellington (+4.9%).
The bias towards growth outside the major centres is even more noticeable amongst core retail merchants. Outside Auckland/Northland, core retail merchants in the regions recorded $2.1 billion card spending in October, with an underlying annual growth rate of 6.1%. This is a similar rate to the trend of recent months.
Annual underlying spending growth was negative for Recreational goods merchants outside of Auckland/
Northland (-0.5%) but otherwise positive for the other major sector groupings. There were no days when underlying spending declined below levels of this time last year across these combined regions.
In contrast, annual spending growth in Auckland/Northland slowed markedly in October. The core retail merchants linked to the Paymark network recorded $1.3 billion card spending in October but the underlying annual growth rate was a mere 1.6% between October 2016 and October 2017. This is the lowest annual underlying growth rate in the region since early 2014.
Some Auckland/Northland merchants groupings showed an annual decline in spending, including clothing/ footwear stores (-6.0%), electrical/electronic shops (-5.0%) and the large hardware/furniture/appliance grouping (-1.7%). Also noteworthy is the low annual growth amongst Accommodation merchants in New Zealand’s largest region (+0.6%).
It is not uncommon for total spending in any region to decline on any one day, relative to the same day the previous year, but Auckland/Northland merchants in total experienced declines in underlying spending on seven days during the month, the first on Sunday 8th October and three in the last week of the month.
Underlying spending growth rates are calculated by excluding large merchants who have entered or exited the Paymark network within the last twelve months, an adjustment that currently amounts to around 5% of pre-adjusted spending nationally.