Consumers markedly cut their spending last month ahead of the surge in Covid-19 cases.
The reduced spending was across the board with the largest fall in clothing. Photo: Unsplash / Arturo Rey
Numbers from Stats NZ show spending using electronic cards fell 7.8 percent in February on the month before.
The decline in spending was across the board with the largest fall in clothing, with sizeable falls also in consumables such as groceries, food and drink, big ticket items, and on fuel and vehicles.
Leaving aside fuel and vehicle related spending, core retail sales fell 8 percent on a monthly basis.
"This drop across the board was the first of its kind since August 2021, when the country was in lockdown at alert level 4," Stats NZ business performance manager Ricky Ho said.
He said working from home and the rise in fuel prices may well have reduced spending on fuel.
Retail spending was 1 percent higher than a year ago.
However, ASB senior economist Mark Smith said the numbers suggested more volatility and tougher times for the retail sector this year in the face of rising prices, higher interest rates, supply disruptions, and a cooling housing market.
"A post-Omicron lift is expected but this is unlikely to be as pronounced as in previous episodes.
"With Covid-19 having been on the scene for more than two years, the consumer looks to be less resilient, with fatigue setting in," he said.
The latest survey of consumer confidence showed sentiment slumping to the lowest since 2004.
