What’s going on here?

Card spending in New Zealand saw a subtle decline in May, with ANZ users cutting back, notably in hospitality, while non-retail service spending rose.

What does this mean?

Card expenditures tracked by ANZ slipped 0.1% from April to May, driven by downturns in apparel and hospitality sectors. Yet, the annual perspective shows a slight 1.1% increase, indicating some resilience. Notably, spending on motor vehicles and fuel plummeted 7.2% year-on-year, reflecting changing consumer habits. On a positive note, non-retail services grew 2.5%, showcasing an interest in diverse spending. Apparel declined 2.3%, yet jewelry sales shined amidst drops in children’s clothing. Hospitality fell 1.3%, though fast food outshone cafes and restaurants, with smaller outlets leading. Meanwhile, spending on cars and fuel lingers below early 2023 levels, influenced by lower fuel costs.

Why should I care?

For markets: Spending patterns evolve.

Investors and analysts should consider how consumer shifts, like reduced spending on motor vehicles and fuel, influence broader economic trends and impact related sectors. Despite declines in hospitality and apparel, robust performance in fast food suggests potential investment opportunities.

The bigger picture: Adapting to consumer changes.

New Zealand’s spending trends reveal significant economic adjustments that businesses and policymakers must acknowledge. Growing non-retail service spending hints at a move towards experiences rather than goods. The drop in traditional apparel and rise in jewelry purchases could indicate shifting consumer priorities amidst economic changes.