Rebuild helps boost retail spending

 Christchurch retailers are following national trends with a flat month for overall spending, helped by retail of clothing, electronics and furniture.

Core retail spending, excluding cars and fuel, was up 0.5 per cent in July with a lift in sales of furniture, hardware and appliances.

But a drop in spending on fuel left overall spending flat in the month.

Smiths City managing director Rick Hellings said spending in Christchurch was in line with the national trends, boosted by imported electronics and appliances.

"Any product related to imports where the exchange rate has been passed on to the consumer tend to be doing well, and those 

where pricing hasn't been affected by the imports tend to be a little flatter. It's just a matter of passing those exchange gains to the public."

Hellings said a recent spate of cooking shows had also fuelled interest in kitchen appliances. New developments in technology - including curved screens - had helped television sales along.

Kieran Kavanagh, of Christchurch furniture retailer Global Living, said the store had had an unusually strong July.

"It just comes down to the rebuild, every second person who comes into the store is building a new house," he said.

Statistics New Zealand said overall spending using electronic cards was flat in July, following a flat month in June, adjusting for seasonal effects. The two weak months of spending followed a strong lift in retail sales in May.

Compared with a year ago, overall spending was up 4.3 per cent, which was the weakest annual growth rate since late 2012, and July's retail figures were weaker than market expectations.

But with an improving job market, and better wage rises expected, Deutsche Bank expected consumer spending to continue to grow "at a reasonable clip" in the coming year. But it may slow next year as lower incomes in the dairy sector hit spending in the regions.

Westpac economist Felix Delbruck said the overall sales numbers were a "little softer" than expected, but spending remained on an uptrend, in line with recent signs of a revival in the housing market.

Spending on durable goods was up $9.8 million, or 0.9 per cent, in July. Durables include furniture, hardware, and appliances as well as pharmacy sales, including cosmetic, and toiletry retailing.

Spending on consumables also rose, up $5.4m, a gain of 0.3 per cent, for food and liquor retailing.

Clothing sales were up a "whopping" 1.7 per cent in the month, Delbruck said, "perhaps a delayed lift as the winter chill set in".
TESS MCCLURE AND JAMES WEIR