Large chain stores gain from pre-Christmas consumer spend

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Large chain stores seem to have reaped much of the gains of the surge in consumer shopping in the run up to Christmas at the expense of small shops, according to new data.

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Numbers from the accounting software firm Xero shows small business revenue overall lifted 1.4 percent year on year in December but retail revenue was down by 2 percent.

That contradicts electronic card spending data from Stats NZ, which showed retail spending was up with a big rise in spending on goods such as furniture, hardware and electronics.

Xero’s New Zealand managing director Craig Hudson said the push to shop local needed to continue.

“[This shows] potentially larger businesses in retail were getting predominant spend coming through rather than Kiwis getting out and supporting those small independent shops.”

Revenue was down for the sector but it did employ more people last month. Retail is now employing 13.4 percent more staff than pre-Covid.

Overall, the number of people employed by a small business increased 6.4 percent on March 2020 to a record high.

All sectors saw job number growth, except hospitality which remained down almost 5 percent.

“This is likely driven in part by the ongoing impact of reduced tourist activity in Queenstown. It remains the only region with job numbers below pre-crisis levels, with a 8.1 percent loss from the first week of March 2020 through to the end of December,” Hudson said.

Revenue for small businesses in Queenstown was down 21.4 percent year-on-year, highlighting the drop in international visitors.

“This is one of the largest year-on-year industry drops we’ve seen since lockdown… When compared to this time in 2019, the impacts of ongoing border restrictions and international travel are now evident as the region misses out on the usual influx of spending from overseas visitors.”

Regions performing well included Wellington with 5.2 percent year-on-year increase, Canterbury up 5.1 percent and Hawke’s Bay up 3.8 percent.

Hudson said overall the small business sector was performing well, but there remained some concern.

“Looking at the retail job growth of 13.4 percent in December but yet revenue was down – there’s a mismatch.

“So that for me is a watch in terms of retail staff levels.”

New Zealand also looked to be doing better than overseas counterparts, with Australian small business revenue down 2.7 percent year-on-year and the UK falling 10.3 percent.

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