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Retail Trade Survey: October 2010
Embargoed until 10:45am  –  14 December 2010
Commentary

Retail Trade Survey – ANZSIC06 implementation

The Retail Trade Survey: October 2010 implements a new industrial classification, the Australian and New Zealand Standard Industrial Classification 2006 (ANZSIC06). There are 15 industries in the Retail Trade Survey under this updated classification. For more information please refer to Implementing ANZSIC 2006 in the Retail Trade Survey published on 6 December 2010.

All references to sales movements are to seasonally adjusted series unless otherwise stated. The Retail Trade Survey excludes GST.  

October 2010

Total retail sales fell 2.5 percent ($137 million) in October 2010, following a 1.7 percent ($94 million) increase in September 2010. This month's decrease is the largest recorded percentage decrease since May 1997 (2.7 percent), and the largest recorded value decrease since the series began in May 1995. It is likely the September 2010 increase reflected spending timed to beat the GST rise on 1 October 2010.  

Core retail sales, which exclude the motor vehicle-related industries, were down 1.6 percent ($71 million) in October 2010, reversing the 1.7 percent ($72 million) increase in September 2010. 

Ten of the 15 retail industries recorded decreases, primarily those that sell big-ticket items and recorded increases in September 2010.

Overall the largest decreases were: 

  • motor vehicles and parts – down 12.6 percent ($85 million)
  • furniture, floor coverings, houseware, and textiles – down 27.8 percent ($47 million) 
  • electrical and electronic goods – down 15.2 percent ($34 million) 
  • pharmaceutical and other store-based retailing – down 7.5 percent ($28 million).

The largest increases were: 

  • supermarket and grocery stores – up 4.2 percent ($58 million) 
  • fuel – up 3.7 percent ($19 million).

 Graph, Retail industry contributions to the change in seasonally adjusted sales values, change from previous month, October 2010.

Sales trend

The sales trend for total retail has been rising since February 2009, up 6.6 percent since then. The trend is at its highest level since the series began in May 1995. The monthly rate of increase has been steady, averaging 0.2 percent over the past year.

The sales trend for core retail has been rising since February 2010, up 2.3 percent, but has eased recently. The core sales trend is at its highest level since the series began.  

 Graph, Monthly retail sales, September 2005–October 2010.

Vehicle-related industries

Motor vehicles and parts

Motor vehicles and parts retailing recorded the largest decrease in October 2010, down 12.6 percent ($85 million). This month's decrease is the largest recorded since September 2005 (down 14.9 percent or $118 million). Motor vehicles and parts had the second-largest increase in September 2010, up 3.6 percent ($23 million).

As can be seen in the graph below the trend for this industry has been increasing since February 2009, up 17.2 percent since then. The trend is still 12.5 percent lower than at its peak in August 2007.

Land Transport New Zealand figures show new registrations of cars and station wagons (including vehicles previously registered overseas) fell 6.6 percent in October 2010 compared with September 2010. 

Graph, Motor vehicles and parts retailing sales; fuel retailing sales, monthly, September 2008–October 2010.  

Fuel 

Fuel retailing recorded the second largest increase, up 3.7 percent ($19 million) in October 2010. It is likely that this increase reflects, in part, the 3 cents per litre rise in fuel excise duty on 1 October 2010.

The trend for fuel sales has been declining since February 2010 but appears to be increasing recently. The trend is now 17.6 percent lower than at its peak in July 2008. Initial trend estimates should be used with caution as they may be revised as more data is available.

 

Core retail industries 

Core retail sales fell 1.6 percent ($71 million) in October 2010 reversing the 1.7 percent ($72 million) increase in September 2010. Nine of the 13 core industries recorded decreases. The largest decreases in core retailing were:

  • furniture, floor coverings, houseware, and textiles, down 27.8 percent ($47 million)
  • electrical and electronic goods, down 15.2 percent ($34 million).

Both industries recorded large increases in September 2010, most likely due to increased sales on big-ticket items before the GST increase on 1 October 2010. In the October 2010 month these industries decreased even more than they had increased in September 2010.

Furniture, floor coverings, houseware, and textiles

In October 2010, furniture, floor coverings, houseware, and textiles retailing fell by 27.8 percent ($47 million), the second largest contributor to the decline in total retail sales. This industry recorded the largest increase in total retail sales in September 2010, at 20.8 percent ($29 million).

The trend for furniture, floor coverings, houseware, and textiles has been decreasing since April 2010, down 4.8 percent since then. The trend is now 17.4 percent lower than at its highest point in July 2007.

 Graph, Furniture, floor coverings, houseware, and textiles retailing sales; electronic and electronic goods retailing sales, monthly, September 2008–October 2010.

Electrical and electronic goods

Electrical and electronic goods retailing decreased by 15.2 percent ($34 million) in October 2010, following a 7.2 percent ($15 million) increase in September 2010. Electrical and electronic goods was the third largest contributor to the total retail sales decrease in October 2010, and the third largest contributor to the total increase in September 2010.

The trend for electrical and electronic goods has been relatively flat in recent months. The trend is now 2.6 percent lower than at its highest point in October 2009.

Supermarket and grocery stores

Supermarket and grocery stores retailing recorded the largest increase in October 2010, up 4.2 percent ($58 million). This follows a 1.0 percent ($13 million) increase in September 2010.

Graph, Supermarket and grocery stores sales, monthly, September 2005–October 2010.  

The trend for supermarket and grocery stores is up 5.0 percent since a turning point in February 2010 and is at its highest point since the beginning of the series in May 1995.

All the food and drink related industries recorded increases.

Actual sales

In actual terms, total retail sales rose 0.6 percent ($30 million) in October 2010 compared with October 2009. Core retail sales rose 0.8 percent ($35 million) over the same period.

Regional estimates

Seasonally adjusted sales in the South Island were down 4.2 percent ($57 million) in October 2010, while sales in the North Island decreased 1.0 percent ($43 million). Waikato was the only region to record an increase in sales, up 0.4 percent ($2 million).

Sales changes in the South Island were as follows: 

  • Canterbury – down 1.4 percent ($10 million) 
  • Remainder of the South Island – down 7.5 percent ($47 million).


Sales changes in the North Island were as follows: 

  • Auckland – down 0.7 percent ($13 million)
  • Waikato – up 0.4 percent ($2 million) 
  • Wellington – down 2.5 percent ($15 million) 
  • Remainder of the North Island – down 1.4 percent ($17 million).

Note that seasonal adjustment is run separately for each region and each industry, allowing the identification of individual variations in seasonal patterns. The total retail sales figure is calculated by adding industry data and therefore may not be the same as the sum of regional data.  

 Graph, Indexed retail sales trend by geographical region, base: September 2006 (=1000), monthly, September 2006–October 2010.

Illustrated in the graph above, the regional sales trends are as follows:

  • Auckland – the trend has risen 14.7 percent since January 2009. The rate of increase has been steady in recent months, averaging 0.5 percent.
  • Waikato – the trend has risen 8.0 percent since February 2009, but has flattened recently.
  • Wellington – the trend reached its highest point in July 2010 and has decreased 1.1 percent since then.
  • Remainder of the North Island – the trend reached a turning point in December 2009 and has fallen 6.6 percent since then. The trend is now 7.5 percent lower than its highest point in March 2008.
  • Canterbury – the trend increased at an average rate of 1.5 percent per month in the six months before a July 2010 peak but has started to decline in recent months.
  • Remainder of the South Island – the trend has fallen 10.3 percent since reaching a turning point, its highest point, in January 2010.

Revisions

There were no revisions to the Retail Trade Survey in the October 2010 month.

Related information

The following information is for actual figures unless otherwise stated. For October 2010 compared with September 2010:

  • The food price index rose 2.2 percent.
  • New registrations of cars and station wagons (including vehicles previously registered overseas) fell 6.6 percent.
  • Seasonally adjusted short-term overseas visitor arrivals fell 2.0 percent. 
  • As published on 9 November 2010, the seasonally adjusted value of the retail Electronic Card Transaction (ECT) series was up 0.8 percent and the core retail ECT series was flat, up less than 0.1 percent.
  • Fuel excise duty rose 3 cents per litre on 1 October 2010.

Other:

  • The Reserve Bank of New Zealand's Official Cash Rate was unchanged at 3.00 percent throughout October 2010.
  • Goods and services tax (GST) increased from 12.5 percent to 15 percent on 1 October 2010.

Measurement errors

All statistical estimates are subject to measurement errors. These include both sample errors and non-sample errors. In addition, the survey applies imputation methodologies to cope with small firms and non-response. These measurement errors should be considered when analysing the results from the survey. For more information on measurement errors, please refer to the 'Technical notes' of this release.

Sample errors

The postal survey was designed to give statistics at the following levels of accuracy (at the 95 percent confidence interval limit):

  • 3 percent for sales at the total national retail trade level
  • 10 percent for sales at the published national retail industry level.

This means, for example, that there is a 95 percent chance that the true value of total retail trade sales lies within 3 percent of the published estimate.

At the industry level, the following sample errors occurred in the October 2010 month (at the 95 percent confidence interval limit):

Retail Trade Survey: October 2010 month sample errors by industry
At the 95 percent confidence interval limit
Retail industry Level
(relative percent)
Movement
(absolute percent)
Motor vehicles and parts 7.2 3.8
Fuel 2.7 0.9
Supermarket and grocery stores 7.1 5.2
Specialised food 6.2 2.3
Liquor 7.2 0.7
Furniture, floor coverings, houseware, textiles 6.4 3.5
Electrical and electronic goods 5.8 6.4
Hardware, building, and garden supplies 3.8 2.1
Recreational goods 6.3 5.3
Clothing, footwear, and accessories 10.0 1.0
Department stores 0.0 0.0
Pharmaceutical and other store-based retailing 6.6 3.7
Non-store and commission-based retailing 11.4 2.8
Accommodation 3.6 2.6
Food and beverage services 4.0 2.1
Total retail trade 2.3 1.7

 

Industries with zero sample error are full-coverage industries. In these industries, all large firms are surveyed and all small to medium-sized firms are modelled using administrative data sourced from Inland Revenue.

Retail Trade Survey: October 2010 month sample errors by region
At the 95 percent confidence interval limit
Region Level
(relative percent)
Movement
(absolute percent)
Auckland 6.6 2.9
Waikato 18.5 0.3
Wellington 13.3 2.1
Remainder of the North Island 11.4 5.9
Canterbury 13.2 3.0
Remainder of the South Island 10.5 4.0


Imputation

Small firms

Small- to medium-sized firms are generally not surveyed. Their variables are instead modelled from administrative data (GST) sourced from Inland Revenue. Ratios calculated from the postal sample units are applied to the administrative data to provide an estimate of their variables.

Non-response imputation

Although every attempt is made to achieve a 100 percent response rate, in practice this does not occur. Values for non-responding businesses are estimated by a number of methods, including:

  • regression imputation
  • historic imputation
  • mean imputation.

Regression imputation involves estimating sales from the unit's administrative data (GST sales) based on the relationship shown by similar businesses. Historic imputation involves multiplying their response in the previous period by a non-response factor. The non-response factor is the average movement of similar businesses over the month. Mean imputation involves estimating a value for a unit by using the average value for a set of similar businesses.

Postal response rate

The response rate describes the proportion of geographic units that provided survey responses. Note that the calculation of this response rate relates only to data for the postal sample. The Retail Trade Survey has a target response rate of 85 percent. The response rate achieved for the October 2010 survey was 87.5 percent.

The table below indicates the percentage of sales imputed in the October 2010 month:

Sales imputed in the October 2010 month
Retail industry Tax modelled Non-response
Percentage of sales
Motor vehicles and parts 8.3 11.5
Fuel 2.1 11.7
Supermarket and grocery stores 5.2 10.5
Specialised food 10.8 15.2
Liquor 12.6 13.1
Furniture, floor coverings, houseware, textiles 14.9 15.0
Electrical and electronic goods 7.7 10.7
Hardware, building, and garden supplies 11.7 9.3
Recreational goods 11.7 13.9
Clothing, footwear, and accessories 7.5 9.6
Department stores 0.0 0.0
Pharmaceutical and other store-based retailing 12.7 15.0
Non-store and commission-based retailing 13.0 11.5
Accommodation 9.5 15.4
Food and beverage services 11.3 16.6
Total retail trade 7.6 11.5

 

For technical information contact:
Neroli Nicholson or Yannick Monteyne
Christchurch 03 964 8700
Email: info@stats.govt.nz

Next release ...

Retail Trade Survey: November 2010 will be released on 21 January 2011.

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