Some small steps forward—for some
The spending growth momentum that appeared to be building but that had faltered in January and February re-emearged in March. Partly this was due to calendar effects (such as holidays) but total spending was also up consistently in each week of the month. Again the change was in the discretionary spend: more purchases at, for example, floor-covering stores and beauty salons.
This pickup is consistent with the well-anticipated recovery in the wider economy this year, and hence serves as welcome confirmation. But dig deeper and the Paymark spending data—capturing around half of the total retail spend—reveal patchiness, and in some cases still outright revenue declines.
The positive news: the tourism sector, one of our two major export earners, is playing a key role in the recovery
First, though, the positive news: the tourism sector, one of our two major export earners, is playing a key role in the recovery, evidenced by higher spending at rental vehicle firms and hotels (the latter almost reaching the previous March 2008 peak). Also of help to tourist operators, it appears we will be holidaying more at home this year judging by spending at local travel agents during the busy month of March coming in below the peaks of the previous four years.
It is this local restraint, plus no doubt strong competition from department stores and supermarkets, that also shows as lower sales still at the likes of clothing retailers, butchers and fruit and vege shops. It is this combination of factors that is probably behind the declining number of merchants in total.
So the momentum is upward for many but cautious optimism remains the catchphrase.
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