NZ: Retail Trade

Thu Aug 13 17:45:00 CDT 2015

Consensus Actual Previous
Q/Q percent change 0.5% 0.1% 2.7%
Y/Y percent change 4.2% 5.4%

Retail sales growth eased in the June 2015 quarter after big gains in recent quarters. Retail sales were up 0.1 percent on the quarter and 4.2 percent from the same quarter a year ago. This follows a 5.1 percent increase in the March 2015 quarter. After removing the effect of price changes, the total retail sales volume rose 5.9 percent in the June quarter, when compared with the same quarter last year.

The largest seasonally adjusted sales volume increase was in non-store and commission-based retailing, up 8.1 percent. This industry includes businesses that are mainly engaged in selling online without a shop-front or physical shop presence. The largest sales volume decline was in fuel retailing, down 0.9 percent.

Retail trade data tracks changes in New Zealand retail sales. As consumption contributes heavily to New Zealand's GDP, a rising retail sales figure can be indicative of rising demand and subsequent inflation. While strong economic growth is typically good for the New Zealand economy, uncontrolled growth and rising inflation may lead to instability and corrective action from New Zealand's central bank. The release was recently changed from monthly to quarterly. The headline numbers are the percentage change in retail trade from the previous quarter and the percentage change in retail trade from the previous year.

Consumer spending accounts a large portion of the economy, so if you know how consumers are behaving, your will have a good indication as to where the economy is headed. Needless to say, that is a big advantage for investors. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.