Supermarket trips were up 5 percent over the quarter compared to a year earlier, but each trolley cart was 11.2 percent more expensive. Photo: RNZ
We're spending more money on covering the basics - and often getting less for it, new data shows.
Kiwibank has released its spending tracker for the September quarter, which shows total dollars spent lifted 5.6 percent compared to a year earlier.
But the volume of transactions dropped 5.2 percent.
Kiwibank senior economist Mary Jo Vergara said households were prioritising essential goods and services over durables, despite the discounting that was happening.
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The growth in dollars spent at the supermarket was double the pace of growth in the number of transactions, she said. Supermarket trips were up 5 percent over the quarter compared to a year earlier but each trolley cart was 11.2 percent more expensive.
Spending on utilities also increased. The amount of money spent on utilities was up 19.3 percent on a year earlier, including rates and energy bills.
"It's really just that we're facing a still pretty cautious spender," she said.
"Households are still prioritising essential goods and services, whether that's food or household utilities over discretionary goods and services that even though we've seen some discounts in that space, there still hasn't been quite enough demand there. So it's clear that food and utility bills are taking most of the household budget."
The number of transactions at cafes have remained steady but the amount spent has increased 5.5 percent. Clothing and footwear spending is down 4.1 percent in dollar terms on a year earlier and the volume of transactions is down 6.1 percent.
She said the amount of money spent on beauty and hair treatments had increased meaningfully over the past few years even if the number of transactions had not.
Cinemas appeared to be leaning heavily on discounts to pull in audiences, she said. "We were looking into it and it seemed like it doesn't matter if you're Hoyts or if you're Event cinemas, they're just always discounts.
"Any day of the week, there's a discount. And it seems to have shown the volume spend doesn't look like it's declining. It's actually been quite steady.
"It's not quite back to pre-Covid levels, but maybe that's a structural thing for that industry. But maybe it shows the power of a deal to kind of get that volume in."
She said demand for housing-related goods seemed to be improving, with the volume of spending on contents and furnishing up 3 percent form a year earlier and home electronics up 6.9 percent.
Building and renovation spending was up 3.8 percent. "The housing market has been lying dormant for some time now. But interest rates are heading lower, towards levels that should breathe new life into the market. And the data may be signalling that households are getting ready for it."
She said lower interest rates and lifting house prices could help to boost spending.
"We're pretty hopeful, rightly or wrongly about the upcoming holiday period with Black Friday and Cyber Monday, they're kind of growing in popularity. And it could be that with more cautious spending from business, from households, they're looking for deals. Maybe this is the period that they can kind of take advantage of that. So it'll be interesting to see how this season compares to last year, where now interest rates are much lower than where they were this time last year. And that should free up some disposable income to be spent elsewhere."
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