New Zealand Card Spending Takes A Slight Hit In July
Photo by AhmadArdity on Pixabay
New Zealand’s credit card spending saw a minor decline in 2024, indicating a potential slowdown in consumer retail activity. According to recent data from Stats NZ, overall card spending decreased by 0.1% in July compared to June.
This is the seventh month that card spending has declined. Although this is a relatively small decrease, it could be a sign of changing consumer behavior and economic pressures.
This decline impacted the retail industry the most, with core retail spending decreasing by 0.5%. This suggests that consumers are starting to tighten their belts in response to rising costs and financial uncertainty.
The hospitality sector saw a major decrease of 1.4%, while apparel and clothing declined by 2.1%. Consumables and durables experienced less significant declines, of 0.2% and 0.4%, respectively. Even fuel spending decreased by 1.6%, while overall card transactions in the vehicle sector dropped 2.7%.
However, some industries didn’t fall victim to this trend, with the non-retail category enjoying growth of 2.1%. This excludes services.
An area that appears resilient is online spending. Although the decline in card transactions is affecting both online and offline transactions, evidence suggests that consumers are turning to the internet for their shopping needs. The shift towards online card purchases is thanks to convenience, accessibility, and the growing range of products and services that can be purchased online.
Online entertainment continues to be a popular category for card spending. Consumers are using their credit cards to access a wide range of digital content and streaming services, including movies, music, and video games. One particularly popular form of online entertainment in New Zealand is online casinos.
New Zealanders’ preference for online pokies and table games stems from the convenience and variety of gaming options available. The growing popularity of online pokies and other online casino sites has significantly contributed to gambling revenue in the country, which is projected to reach US $1.25 billion in 2024.
In 2020 and 2021, the NZ e-commerce landscape saw rapid growth, and it has not shown any sign of slowing down yet. E-commerce revenue is predicted to be around US $5.2 billion at the end of 2024 and is expected to grow to US $8.43 billion by 2029. Online credit card transactions are expected to make up a big portion of this total.
Although it is difficult to quantify the impact that card spending had on these sites, it is clear that it is a significant contributor.
As New Zealand continues to navigate economic challenges like high inflation and interest rates and changing consumer behavior, it will be interesting to see how card spending trends will continue to evolve for the remainder of the year.
The data from July may indicate a decrease in credit card spending, but it is important to remember that this is a short-term trend, and long-term data may represent different patterns.
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