Retailers have cracker year end
Palmerston North retailers have had a cracker Christmas and end of year as the city’s shoppers enthusiastically opened their wallets.
Shoppers spent $183.5 million in the city on the Paymark network last month, 6.3 per cent higher than in December 2016.
And while the increase in spending has slowed from the previous year’s 9 per cent annual growth, Palmerston North shoppers were still spending just under $50 a transaction on average.
Retail NZ spokesman Greg Harford said the city had a great December, with significantly higher spending growth than both Auckland and Wellington – where spending grew 3.3 per cent and 3.9 per cent, respectively.
Across the country, Kiwi shoppers spent a record $60 billion last year, with $5.94b spent in December alone.
Harford said the holiday spending hike was exactly what retailers had been hoping for, and counting on.
The sector got off to a ‘‘gloomy’’ start in 2017, with almost half falling short of their sales forecasts in the first quarter of this year, he said.
Plaza Shopping Centre manager Andrew Heaphy said, along with the strong November sales, the holidays had capped a generally pleasing year.
The Palmerston North mall’s final December sales figures won’t be in for another week, but what he’d seen so far indicated they were ‘‘well up’’ on last year.
‘‘There was an extra weekend in December this year – that made for a good start.
‘‘And the Thursday before Christmas was probably the biggest single day we’ve ever done.’’
The Plaza counted more than 40,000 shoppers entering the mall that day, and Boxing Day had been almost as busy, he said.
Brew Union co-owner Jules Grace said the pub’s patrons weren’t the only ones feeling merry over the holidays.
‘‘December was a pretty good month for us. Although, it’s hard to tell how good because we’ve only been open for nine months – we’ve got nothing to compare it to.’’
The bar was so busy on New Year’s Eve that when Grace came in to start celebrating, he felt he needed to jump behind the bar and help out instead.
Harford said there was definitely a solid silver lining for the end of the year, but it came with a small cloud.
Many smaller retailers were concerned the costs of increasingly popular contactless card systems, such as Paywave, could cut into the benefits of the spending increase, he said.
Eftpos transactions cost retailers nothing. But when a customer uses a contactless card, it’s treated like a credit card transaction, with a 1 or 2 per cent fee.
‘‘If you get a 2 per cent increase in spending at your store, but most of that growth is in contactless card transactions, your margin is eroded instantly,’’ he said.
Nationally, spending with debit cards stayed level compared with last year. But credit card and contactless card spending was up 11.5 per cent.
Paywave-style systems and credit cards were now used in nearly half of all transactions on Paymark’s network.
In fact Brew Union proved so popular over the holidays, they’d underestimated the demand for some of their craft beers and ran out, he said.
Grace said Paywave-style systems made life easier for customers, which helped boost both patron numbers and spending at the bar. ‘‘Unfortunately, we have to accept the extra cost ... It’s the way things are moving, so we decided to get that started early.
‘‘And you can’t really get upset if there’s [still] an increase in spending.’’