E-card sales in New Zealand surged in October 2008 due to increasing expenditure on consumer and clothing. This shift in consumer spending is a result of income tax reduction.
According to Statistics New Zealand (SNZ), the retail sales from electronic cards in New Zealand increased 0.5% in October 2008. The total seasonally-adjusted e-card spending, comprising of transactions in industries other than retail, witnessed 0.5% increase in the same month, following an increase of 0.8% in September 2008, as reported by LSE.
Transactions from electronic cards, including credit cards, debit cards and charge cards, indicated that the retail sales grew by approx NZ$ 20 Million ($10.67 Million) to NZ$ 3.8 Billion ($2.02 Billion) in October 2008. Also, a seasonally-adjusted 1% rise was recorded in the core retail groups’ electronic transactions, excluding the automobile-based industries. Further, as compared to 83 Million electronic card transactions in New Zealand during October 2007, 90 Million transactions were recorded in October 2008.
The profound increase in e-card spending in New Zealand is due to the high expenditure on clothing and durable goods. Consumers are spending heavily on consumer goods and clothes due to the decline in credit cost and lower income tax.
Additionally, the increasing popularity of e-transactions among consumers and retailers has raised its share in the overall retail sales. Also, accounting for about 80% of the total ECT value, the retail industries have contributed significantly to the recent increase, said the industry experts.
Though e-card spending details are not standard to judge the monthly retail sales as it does not include cash and cheque transactions, some industry analysts view them as an indicator of consumer expenditure.
According to a Research Analyst at RNCOS, “The reduction in credit cost and low income tax are helping the New Zealand’s e-card spending to grow. Previously, consumers were experiencing the heat of rising inflation, but this upward trend is indicating that people of New Zealand have once again started spending on consumer goods. However, the growth is not very remarkable; even then, it has brought some reasons to smile for retailers who were facing heavy losses due to economic slump.”
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