Retail spending held up better than expected in February, as stocking-up on groceries outweighed the drop in tourist numbers. Economists at Westpac Institutional Bank expect to see some weakness in spending in the coming months.
“Credit and debt card spending held up better than expected in February, in the face of a sharp drop in tourist numbers. Total card spending was flat for the month, while spending in retail stores rose by 0.6%, against the -0.3% that we and the market were forecasting.”
“Hospitality spending saw only a modest decline of 0.8% for the month, while the non-retail category which includes items such as transport was down 1.1%. We were expecting a bigger hit.”
“The other notable surprise was a sharp 2.4% rise in spending on groceries, which was likely due to people stocking up as concerns grew about the spread of Covid-19.”
“We expect a more substantial hit to spending in the coming months, as traveller wariness and social distancing in response to the Covid-19 outbreak become more prevalent.”