Spending

Growing number of Kiwis plan to cut spending, consumers spend more on groceries – survey

The latest data is the “lowest on record”, but just at the start of July, 27% of people planned to cut spending.

Alexander said the drop in consumer spending signals “additional pain” for retailers across the motu as the Reserve Bank of New Zealand (RBNZ) battles inflation with steep interest rate hikes.

“Following the recent round of interest rate hikes, there has been a noticeable deterioration in the net proportion of our 1,000+ respondents saying they plan to spend more in the near future,” Alexander said.

So where are Kiwis likely to spend their money?

The spending plans survey revealed three key areas Kiwis plan to spend on, namely groceries, gardening supplies and domestic travel.

Alexander said groceries had to be on the list due to higher prices, while gardening equipment was due to the changing seasons and domestic travel as the summer months approach.

“Spending plans for groceries remain very high, but not as high as in June, as the shock of higher prices seems to have hit hard.”

The rise in inflation started in March 2021, rising from 1.5% to 7.3% in June the following year. As a result, the RBNZ began to increase the OCR – making borrowing more expensive, in a bid to make Kiwis spend less and reduce inflation.

Alexander’s data comes after a Trade Me survey found that more than half of its respondents planned to cut costs this Christmas.

He revealed that 55% of respondents plan to buy second-hand gifts due to the rising cost of living as inflation rises and people’s disposable income declines.