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Summarised by Centrist
Boxing Day sales were up by 13% this year, with New Zealanders spending nearly $68m. This is in contrast to subdued pre-Christmas activity, which dropped nearly 1% compared to 2023. Shoppers hit up bookshops, clothing stores, and hardware outlets, according to payment processor Worldline.
Bruce Proffit, the company’s chief sales officer, noted that this rebound follows a challenging year marked by economic pressures like Cyclone Gabrielle.
However, recent data suggests that debt is underpinning much of this holiday spending. Auckland based credit reporting agency Centrix reports that consumer arrears rose to 12.14% in October, affecting 461,000 Kiwis, while mortgage arrears climbed 10% year-on-year. Financial hardship cases increased by 20%, and Buy Now Pay Later (BNPL) services saw a spike during the festive season.
In November 2024, total credit card spending fell by 4.5% year-on-year to $3.7b, while total credit card debts dropped by over $6b in the past year, down about 2% annually. Despite these declines, credit limit utilisation rose to 30%, reflecting tighter budgets and increased reliance on available credit.
Businesses are also feeling the pressure, with credit defaults rising 16% and company liquidations up 27% year-on-year. Wholesale trade has been hit hard, with insolvencies in grocery, machinery, and furniture sectors rising by 82%.
