Data from Dot Loves Data, based on ANZ card transactions, showed that spending priorities changed significantly in the final quarter of 2024 compared to the same period in 2023. Essentials took precedence, and many Kiwis struggled to manage debt. Payments to debt collection agencies surged by 117 per cent, highlighting financial difficulties nationwide.
One growing trend was the reliance on Buy Now Pay Later (BNPL) services. While these options allowed consumers to manage short-term affordability, they also posed risks for those unable to meet repayments. This underscores the importance of responsible credit offerings and financial literacy.
Certain sectors still saw strong consumer demand despite economic pressures. The lottery industry, fast food chains, and food delivery services experienced growth. This data indicated people continued to indulge in small, accessible treats. Supermarket spending increased by 4 per cent, largely in line with inflation. Cost-conscious shoppers opted for budget-friendly retailers such as Pak ‘n Save.
Rising costs in other areas put additional pressure on households. Insurance premiums saw an average increase of 11 to 12 per cent. Government services, including council rates and NZTA fees, surged by 23 per cent. These hikes further strained disposable incomes, prompting cutbacks in discretionary spending.
Hospitality and retail were among the hardest-hit sectors. Restaurants struggled as consumers opted to dine at home. Apparel retailers, particularly family clothing stores, saw reduced sales. The vehicle market also declined, reflecting hesitancy towards making large financial commitments.
Despite cautious spending in most areas, online retail and digital services thrived. Online shopping grew between 12 and 15 per cent compared to 2023. Purchases on international platforms like Temu and Shein increased by as much as 30 per cent. This shift in consumer behaviour suggests that traditional retailers may need to enhance their digital presence to remain competitive.
Streaming services and digital entertainment, including PlayStation Network purchases, also saw increased spending. This indicated that consumers prioritised affordable, home-based entertainment over out-of-home experiences.
BNPL services saw a notable uptick, particularly for household appliances, rising by 10 to 17 per cent. While flexible financing options attract customers, companies must carefully assess credit risk to ensure long-term sustainability.
The data indicates that businesses must adapt to evolving consumer behaviour by focusing on affordability, online retail, and targeted advertising. As financial pressures persist into 2025, strategies that align with cautious yet digitally savvy consumers will be key to success in the New Zealand market.
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