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photo: RNZ/Rebekah Parsons-King
Retail sales fell in the June quarter, reflecting rising prices and high interest rates weighing on consumers’ wallets.
Data from Statistics New Zealand showed retail sales fell 1.2% in the three months to June after adjusting for inflation. The decline continues a two-year downward trend.
Sales of electronics, motor vehicles, hotels and clothing fell, while sales in supermarkets rose.
New Zealand Retail Association chief executive Carolyn Young said the figures showed the huge challenges facing retailers.
But she said the economy was expected to pick up as the Reserve Bank cut the official cash rate and promised further cuts.
“We are all hoping that last week’s OCR cut and recent tax cuts will help kick-start the economy and provide a turnaround for the retail sector. While we know this won’t happen overnight, a turnaround in consumer confidence is critical. Ongoing financial pressures over the past few years have squeezed households’ appetite for spending.”
Sales fell in 14 of the 16 regions, with the exception of Canterbury and the West Coast.
Westpac senior economist Michael Gordon said the figures were in line with other soft data for the June quarter and suggested GDP data, due in mid-September, was also likely to be soft.
He said that while high interest rates and prices are easing, pressures on consumers are likely to be replaced by concerns about job security and income growth.
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