Christmas spending spree starts

Now might be a good time to buy or put a deposit on a car or electric bike.

The pre-Christmas spending frenzy is starting to build, picking up in November and bringing a flurry in the last week before December 25 – on a Monday this year.

Based on 2006, when Christmas Day last fell on a Monday too, the busiest shopping day is likely to be the Friday before Christmas this year (December 23), as was the case in 2016.

Taking insights from Paymark’s 2016 records, national spending is likely to rise to 156% of the weekly average of the first ten months of the year. The frenzy is relatively more in the regions, including in Gisborne (173%), Hawke’s Bay (171%) and Nelson (167%) in 2016. By comparison, the last week before Christmas in Wellington was only 49% above average in 2016.

Spending is likely to jump by about 10% around this time of year and then continue to rise towards Christmas, judging by previous Paymark network patterns.

Last year’s Paymark figures, when Christmas Day was on a Sunday, show spending in weeks that ended on a

Saturday in early November around 105% of the weekly average of the first ten months of the year, then jumping to 115% in the fourth week and eventually rising to the 156% in the week immediately before Christmas.

Recent figures show the regions have also been to the fore lately. Spending through Paymark totalled $5 billion in October. On an underlying basis, the annual growth rate was 4.3% and the seasonally adjusted monthly growth rate was 0.6%. One dampening factor on the annual growth rate was the occurrence of five Sundays in October, which helps spread the growth over an extra week.

Highest annual spending growth during September was in West Coast (10.2%), a sharp turnaround from the previous month, with all other regions also reporting growth above the national average for the month. The lowest underlying annual growth rates were in Auckland/Northland (up 2.0%), Canterbury (2.5%) and Wellington (4.9%).

The bias towards growth outside the major centres is even more noticeable among core retail merchants. Outside Auckland/Northland, core retail merchants in the regions recorded $2.1 billion card spending in October, with an underlying annual growth rate of 6.1%, similar to recent months.

In contrast, annual spending growth in Auckland/Northland slowed markedly in October. The core retail merchants linked to the Paymark network recorded $1.3 billion card spending in October, but the underlying annual growth rate was a mere 1.6% between October 2016 and October 2017. This is the lowest annual underlying growth rate in the region since early 2014.