New Zealand Retail Sales Tumble Amidst Q2 Lockdown

Retail sales values in New Zealand plummeted 15 percent on quarter in the second quarter of 2020 during the COVID-19 lockdown, Statistics New Zealand said on Monday - marking the largest drop on record going back 25 years.

Individually, declines in value were led by food and beverage services, down 40 percent (NZ$1.2 billion); fuel retailing, down 35 percent (NZ$770 million); motor vehicle and parts retailing, down 22 percent (NZ$729 million); and accommodation, down 44 percent (NZ$418 million).

"This unprecedented fall in the June quarter was not unexpected, with COVID-19 restrictions significantly limiting retail activity," retail statistics manager Kathy Hicks said. "Non-essential businesses closed temporarily for about half of the quarter during alert levels 4 and 3."

Most industries saw unprecedented sales falls in the June quarter. Sales for food and beverage services fell 40 percent or NZ$1.2 billion in the quarter, the largest drop of any industry.

"For a team of 5 million, that is equal to each person spending about $18 a week less on eating out over the June quarter," Hicks said.

Fuel retailing had the second largest fall, down 35 percent or NZ$770 million. These falls were followed by: motor vehicles and parts retailing, down 22 percent (NZ$729 million); accommodation services, down 44 percent (NZ$418 million); and hardware, building, and garden supplies down 16 percent (NZ$350 million).

These falls were partly offset by a substantial increase in supermarket and grocery stores, up 12 percent (NZ$615 million) from the June 2019 quarter. This follows a record rise of 13 percent (NZ$665 million) in the March 2020 quarter.

"Supermarkets and grocery stores were essential services that stayed open during the lockdown, and the strong increase in sales values reflects that," Hicks said.

Sales values for the non-store and commission-based industry rose 20 percent (NZ$94 million) in the June 2020 quarter. Online businesses were in demand during the lockdown period, providing a wide range of products and the advantage of home delivery. Electrical and electronic goods retailing was up 5.4 percent (NZ$49 million).

"These businesses were able to operate online under lockdown as an essential service." Hicks said. "They provided food deliveries and electronic supplies, such as heaters or computer monitors for home office set-ups during lockdown."

The total volume of retail sales dropped 14 percent on quarter.

Sales volumes for food and beverage services were down 42 percent. The second largest fall was for motor vehicles and parts retailing (down 22 percent).

These falls were followed by fuel retailing (down 25 percent), hardware, building and garden supplies (down 18 percent), and accommodation, (down 45 percent).

"Fuel retailing was affected partly by lower demand due to non-essential travel restrictions and cheaper prices at the pump," Hicks said.

Retail sales values fell across all 16 regions in the June 2020 quarter when compared with the June 2019 quarter.

The Auckland region had the largest dollar value fall this quarter, down 13 percent (NZ$1.2 billion). Canterbury had the next largest fall in dollar terms, down 17 percent (NZ$516 million).