Retail Spending Shows Decline in New Zealand - October 2024
Summary of key events:
- New Zealand’s retail spending declined by 0.7% in October 2024, according to multiple sources. This dip reflects ongoing challenges in the retail sector, including high living costs and a challenging economic environment. Stats NZ reported a notable decline in spending across multiple categories, particularly discretionary spending, which has been under pressure for months.
- Retail NZ also highlighted the continuation of a “difficult sales environment,” attributing weaker spending to reduced consumer confidence and rising costs for businesses.
- These findings align with the trends observed by Marketview, underscoring the broader impact of economic pressures on retail activity in New Zealand.
- Read more to learn what you can do to beat the market blues for your Shopify store this Christmas.
Retail spending in New Zealand took a hit in October, dropping by 0.7%. This decline highlights the ongoing challenges facing both businesses and consumers as economic pressures mount. Let’s talk about what’s going on and what New Zealand stores can do about it.
Marketview’s latest data confirms a 0.7% dip in retail activity last month, reflecting cautious spending by Kiwis amidst rising costs and shrinking disposable incomes.
Early data for November has also come out, painting a similar picture of flatter than expected sales, disappointing a lot of New Zealand merchants that were banking on a stronger Labour Weekend and Black-Friday Cyber-Monday frenzy.
Stats NZ also reported decreases across multiple spending categories, particularly in discretionary items. Retail NZ described the environment as ‘difficult,’ with consumer confidence continuing to waver.
Experts point to rising living costs and high interest rates as key reasons for the slowdown. Businesses are grappling with higher operational expenses while consumers tighten their belts.
This isn’t an isolated trend. The data reveals that retail activity has been subdued for several months, impacting industries from hospitality to durable goods. And it’s not just about less spending—it’s a sign of broader economic shifts.
So, with it all looking pretty grim, what do we do about it going into the Christmas sales period and 2025? I’ll be blunt, a number of these you hopefully have thought about and started putting into motion well before now, as these are concepts we have been discussing with our merchants all-year, but let’s discuss it anyway.
First off, you need to be starting your promotions earlier. Consumer attention is increasingly becoming a competition to snatch before they spend money with your competitors, and we saw a number of stores start their BFCM promotion as early as November 1st. Ridiculous stuff, I know, but this trend may be here to stay.
Secondly, make sure your range reflects consumer spending habits. A lot of consumers in New Zealand are chasing cheaper alternatives, so where possible focus on selling essentials and practical options, and stock the lower range over the luxury options.
Bouncing off the last point, throughout this entire year we have seen average cart value go down. Make upgrades to your Shopify store to help combat this, such as offering your products in bundles, or add-ons at the cart or checkout stage to increase your average order value.
Finally, think about what you can do for those last-minute shoppers. Do you offer overnight shipping or local delivery? Make a point of it on your home-page and product page, and blast out gifting ideas across your channels right up until Christmas.
These are just a few ideas to hopefully help you through this slump, and fingers crossed 2025 will treat us better with interest rates easing.
