Retail card spending fell $530 million in August 2020 compared with July as Auckland entered COVID-19 alert level 3, Stats NZ said today.

“The fall in retail spending in August was not surprising, as higher alert level restrictions were set to slow the second wave of COVID-19,” retail statistics manager Kathy Hicks said.

In actual terms, retail spending using electronic cards was $5.4 billion in August 2020, down $46 million (0.8 percent) from August 2019. In contrast, retail spending in July 2020 was up $610 million (11 percent) on July 2019.

“Auckland was the only region under alert level 3, but this third of New Zealand’s population could only spend on restricted services, resulting in lower card spending at the national level,” Ms Hicks said.

Card spending fell in four of the six retail industries in August 2020 compared with August 2019: hospitality, fuel, apparel, and motor vehicles (excluding fuel).

Hospitality hit hard again

Spending on eating out (food and beverage services) and on hotels, motels, and other accommodation had the largest fall in August 2020, down $192 million (18 percent) on August 2019.

“Renewed measures to slow the spread of COVID-19 meant the hospitality sector was hit hard again with falling sales, just as businesses were picking up in July," Ms Hicks said.

 “Flights in and out of Auckland were also restricted and airlines could fly only a limited number of passengers because of social distancing measures, reducing domestic travel."

Hospitality struggles under higher COVID-19 alert level restrictions has a more detailed breakdown on hospitality card spending data.

Fuel spending remains low

Fuel spending was down $107 million (19 percent) in August 2020 compared with August 2019.

“Restrictions on non-essential travel in Auckland from August 12 as well as lower prices at the pump led to reduced spending on fuel,” Ms Hicks said.

 COVID-19 data portal showed weekly traffic counts dropped significantly in Auckland after the shift to COVID-19 alert level 3.

Supermarket spending continues to grow

Spending on groceries and liquor (consumables) had the largest increase, up $265 million (13 percent) compared with August 2019. 

“Kiwis stocked up on groceries and drinks before Auckland’s shift to COVID-19 alert level 3 and the rest of New Zealand’s shift to level 2," Ms Hicks said.

“Spending on supermarkets has been strong for the last six months beginning with the record high in March, as they remained open as an essential service under all alert levels."

Increase in spending on long-lasting goods

Spending on furniture, hardware, appliances, and other durables had the next largest increase, up $55 million (4.2 percent) in August 2020 compared with August 2019.

“This is the fourth consecutive month where spending on furniture, hardware, appliances, and other durables have increased since April’s significant fall. However, this month’s increase is not as strong as the previous three months,” Ms Hicks said.

Key travel restrictions and COVID-19 alert system timeline

• 19 March 2020: New Zealand’s borders close to almost all travellers, except for returning New Zealanders.
• 25 March 2020: New Zealand enters COVID-19 alert level 4.
• 27 April 2020: New Zealand enters COVID-19 alert level 3.
• 13 May 2020: New Zealand enters COVID-19 alert level 2.
• 8 June 2020: New Zealand enters COVID-19 alert level 1.
• 12 August 2020 : Auckland enters COVID-19 alert level 3 and rest of New Zealand enters COVID-19 alert level 2.
• 31 August 2020: Auckland enters COVID-19 alert level 2 with some extra restrictions on social gatherings, funerals and tangihanga and rest of New Zealand remains at COVID-19 alert level 2.