Retail paymark payments in December beat previous year

Retail paymark payments in December beat previous year
Retailers had a positive end to 2020, with payments through Paymark in December up 5 percent on the year before.

Close up of a customer hand paying with a contactless credit card reader in a bar

Overall spending through Paymark was up by just 0.1 percent for the entire year (File image).
Photo: 123RF

The growth came after a damaging few months earlier on in the year, at the time of the level 4 lockdown, when payments were down by more than 15 percent.

It meant that overall spending through Paymark was up by just 0.1 percent for the entire year. In comparison, growth over the past few years has ranged between 4 and 8 percent.

“What we’re seeing is a remarkable story of resilience in the retail sector,” Paymark’s spokesperson, Paul Brislen, said.

“With Covid, with the lockdown, with the ongoing problems with supply chains, I think the expectation was that New Zealand, much like the rest of the world, would really come off the boil.

“And while we’ve seen a drop in terms of retail spending, we’re still in positive territory.”

But it was a mixed bag when it came to a sector-by-sector breakdown.

While food and liquor stores experienced significant growth at 11.5 percent for the year, for the hospitality sector, transactions through Paymark were down 4.5 percent.

Similarly, for stores that sell day-to-day goods – such as clothes, computers, couches and cosmetics – the year was down by 3.2 percent.

But both sectors had a strong end to the year, and December offered light at the end of the tunnel, Brislen said.

“It bodes well for the sector during the summer months.

“Kiwis are going back to work finally. Maybe we’ll start to see a bit of a pickup in terms of a more stable sector, and I think that will be welcomed by most of the retailers who have had quite a rollercoaster of a year.”

Accommodation sector still not faring well

All regions across New Zealand were up on 2019, except for Auckland, Southland and Otago.

Brislen said what tied them was their dependence on visitors, and the cut-off from international visitors had hurt them more than others.

He said the accommodation sector was being damaged, and still not seeing the December respite offered to other businesses.

Payments through Paymark were down 30 percent for the year in December.

Meanwhile, a report from Tourism Industry Aotearoa (TIA) showed hotel occupancy is down by 30 percent.

On average, just half of the available rooms were booked out, according to Hotel Data New Zealand.

For the past four years, that figure has sat about 80 percent.

On top of that, the average price for a night’s stay has dropped by $10, causing a knock-on effect on the revenue earned per available room. In 2019, on average, a hotel earned $152.38 per night for every available room.

That has dropped by 40 percent, down to $91.17.

“At those revenue levels, the majority of hotels which remained open in 2020 were operating at a loss,” TIA boss Chris Roberts said.

“Many will be relying on at least a partial opening of the borders to be able to return to profitability.”

Car sales still slow but hopefully speeding up

A newly released report looking into car sales showed there was a drop of more than 20 percent in 2020 compared with 2019.

In total, just short of 120,000 vehicles were sold, with the most popular being small and medium SUVs, followed by 4×4 utes, and then medium cars.

The most popular model was the Ford Ranger.

While that figure is down, Motor Industry Association chief executive David Crawford said it was better than they were expecting.

The association predicted a drop in sales by a third back in May, after they recorded weak March and May months, and a virtually non-existent April.

But in June and July, they recorded surprisingly strong sales.

“What it turned out is because people couldn’t travel overseas, what we get is a different type of spending by New Zealanders,” Crawford said.

“So they have been using the money, doing things like, trading in a vehicle, buying bikes, boats, caravans, doing house renovations.

“That’s driven sales up a bit.”

The industry is still anticipating an up-and-down 2021, but there are hopes this year will see sales back to their reliable ways.

“With the rollout of the vaccine progressively throughout the year, we will expect sales to still be a bit bumpy for the first half,” Crawford said.

“But we think by the end of 2021, sales should have recovered most of what we don’t have at the moment.”

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