Hospitality suffers as spending fell sharply in August

In August, New Zealanders' spending habits shifted, with travel, recreation, and movie theaters experiencing growth while hospitality and household goods saw declines. While ANZ card spending remained flat on a seasonally adjusted basis, annual growth slowed to 4.1 percent from 6.1 percent in July. The bank attributed the slowdown to poor weather conditions in August, which may have impacted consumer spending patterns.

Despite the overall cooling of spending, certain sectors thrived. Tourism and recreation spending rose by 2.3 percent in August, marking an 8.8 percent increase compared to the previous year. Airline and airport spending also saw a significant boost, up 9.4 percent from a year earlier. Additionally, movie theater spending surged more than 10 percent and was 77.4 percent higher than a year ago, suggesting renewed enthusiasm for cinema-goers.

However, other discretionary categories faced challenges. Hospitality spending dropped 1.0 percent in August, following a stronger performance in July. Housing-related durables, encompassing a range of durable goods, experienced a 1.3 percent decline. Collectively, these two categories represent nearly a third of all card spending.

Fuel spending decreased by 1.5 percent in August, even as prices at the pump rose. Nevertheless, fuel expenses remained 8 percent above the same period in the previous year. ANZ observed mixed overall spending trends, noting elevated fuel spending alongside a continuing recovery in travel activity. The bank also highlighted that while card spending has been broadly stagnant in recent months, annual growth has remained positive and real spending has steadily increased over the past two years.