Slower sales growth for retailers in June quarter

New Zealand-based online-only stores recorded 7.9 per cent growth over the past quarter – well ahead of total sales growth at 0.1 per cent -which shows that New Zealanders are increasingly turning to the Internet and mobile devices to complete their shopping.

The volume of real retail sales rose 0.1% in the second quarter compared with the first, Statistics New Zealand said Friday.

The figure, well below the downwardly-revised 2.3% increase of Q1, and forecasts for rise of 0.5%, marked the weakest quarter of growth since September quarter 2012. “Retailers are reporting that business has been steady, but not stellar through until the end of June”, Retail NZ Chief Executive Mark Johnston said today.

“Although just over half the industries had sales volume increases this quarter, they were modest in size compared with growth in recent quarters”, business indicators manager Neil Kelly said in a statement. Economists had expected a rise of 0.8%.

The Reserve Bank of New Zealand has cut its cash rate in the two previous reviews to counter a crash in dairy prices, low inflation and a high exchange rate.

Volumes of sales were up 2.3 per cent in the March quarter boosted by lower petrol prices earlier in the year.

“Despite the challenges, retailers are expecting sales over the next quarter to be steady, and for job numbers in the sector to remain stable”. And while there were no figures on spending by New Zealanders on foreign websites, it was thought to be rising fast.

Fuel retailing was the biggest drag on consumer spending, shrinking 0.9 percent as the value of spending on fuel rose 3.2 percent on more expensive petrol prices.

Accommodation retailing volumes shrank 1.7 percent in the quarter, for a 0.1 percent decline in values.

Stripping out vehicle-related purchases, core retail sales volumes increased 0.1%, compared to 2.5% growth in the March period.

Singapore will release June data for retail sales, with analysts looking for a decline of 2.6 percent on month and an increase of 3.5 percent on year.

The volume of non-store and commissioned-based retailing jumped 36 percent in the year, for a 35 percent gain in the value of sales, while the volume of electrical and electronic goods climbed 14 percent for a 4 percent increase in the value of sales.