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2023 was another record year for spending, but consumers were more careful with purchases – Worldline NZ

As consumer spending in December ended 2023 on a weaker note, figures released by Worldline NZ today show that while 2023 set a record for consumer spending, average transaction value was down, suggesting shoppers were more careful with purchasing decisions.

Consumer spending through Core Retail merchants in Worldline NZ’s payments network (excluding Hospitality) set a new high for the full 12 months of 2023, reaching $36.84B, which is up +3.8% on 2022 and up +18.3% on 2019. However, the average transaction size in 2023 was $51.10, down -1.5% from 2022.

Worldline NZ’s Chief Sales Officer, Bruce Proffit says that despite the record spending volume, cost-of-living challenges undoubtedly made 2023 a tough year both for consumers and retailers.

“Consumers may have made more transactions through retailers in Worldline NZ’s payments network in 2023 than in the previous year – as is the usual pattern – but the average transaction value declined, in spite of general consumer price inflation,” says Proffit.

Proffit says the lower average transaction value was against a trend of generally rising consumer prices, suggesting consumers were being more selective, possibly bypassing higher value products or replacing them with cheaper alternatives. “That said, they were also spending more often, so the net effect was another year of record spending,” says Proffit. “There was also a tendency towards more spending at Food & Liquor stores (up +8.0% for 2023) but less in other retails sectors, such as Clothing & Footwear (-0.1%) and across a range of Hardware, Garden & Furniture stores (-6.2%).”

WORLDLINE All Cards underlying- spending for CORE RETAIL less HOSPITALITY merchants for 2023

Underlying-

Underlying-

Measure

NZ Total

Annual % change on 2022

Annual % change on 2019

Value of spending ($millions)

$36,843

+3.8%

+18.3%

Number of transactions (millions)

721.5

+5.4%

+9.2%

Average transaction value ($)

$51.10

-1.5%

+8.3%

Figure 1: All Cards NZ annual underlying- spending growth through Worldline in 2023 for Core Retail (excluding Hospitality) merchants (- Underlying excludes large clients moving to or from Worldline)

Looking at December 2023 on its own, consumer spending through Core Retail merchants (excluding Hospitality) in Worldline NZ’s payments network reached $3.84B for the month, up just +0.4% on December 2022, and up 16.2% on 2019.

Proffit says that while Christmas spending exceeded 2022 levels, this low growth amounted to a slow end to the year. “We previously reported a rising spend – seasonally and annually – ahead of Christmas Day, but the annual growth rate was weak in December overall, especially in the last week of the month which saw spending fall below year-ago levels, including on Boxing Day,” says Proffit.

“To some extent, pre- and post-Christmas spending may have suffered on account of consumers doing this shopping in November’s Black Friday sales. However, the bigger picture is that spending growth was simply modest over the latter months of 2023, with annual growth over the last four months slowing from earlier in the year to average only 1.9%.”

In the regions, the annual growth rate in December 2023 was highest in Otago (+5.5%) and Whanganui (+5.5%) and lowest in Southland (-4.9%). Spending growth was below year-ago levels in Auckland/Northland (-1.0%).

WORLDLINE All Cards underlying- spending for CORE RETAIL less HOSPITALITY merchants for December 2023

Value

Underlying-

Underlying-

Region

transactions $millions

Annual % change on 2022

Annual % change on 2019

Auckland/Northland

1,431

-1.0%

12.0%

Waikato

330

0.5%

22.0%

BOP

269

-1.5%

14.5%

Gisborne

36

-1.0%

7.4%

Taranaki

90

-3.3%

24.3%

Hawke’s Bay

142

2.0%

22.9%

Whanganui

50

5.5%

31.2%

Palmerston North

117

0.1%

21.3%

Wairarapa

49

1.4%

23.0%

Wellington

324

0.9%

12.2%

Nelson

83

2.8%

13.9%

Marlborough

52

3.3%

17.3%

West Coast

28

1.9%

26.0%

Canterbury

463

2.4%

22.0%

South Canterbury

66

0.7%

20.9%

Otago

221

5.5%

18.8%

Southland

88

-4.9%

11.6%

New Zealand

3,841

0.4%

16.2%

Figure 2: All Cards NZ underlying- spending through Worldline in December 2023 for core retail excluding hospitality merchants around (- Underlying excludes large clients moving to or from Worldline)

While 2023 may have ended on a quieter note, consumer spending in the Core Retail sectors (excluding Hospitality) through Worldline NZ’s payments network was $674m in the first seven days of 2024, up 4.5% on 1-7 January 2023 and up 25.4% on the same week in 2019.

“While it is promising for retailers to see that consumer spending has picked up slightly in the first week of 2024, this is too short a time period to make definitive inferences on how trends will continue in the coming months,” he says.

 

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