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Santa's gift sack is getting heavier

18 December 2014

We Kiwis can’t wait for the Christmas holidays to roll around. We love catching up with friends and family, traveling around the country, hitting the beaches and taking a well-earned break. We also loosen our purse strings at this time of year as we splurge on Christmas presents, food, entertainment and trips away. Kiwis often save up to make sure they can make the most of their time over this period too, so when the time comes, we spend. And when we spend, money moves around and that is where payments come in. Payments are the ‘economy in action’. We’ve been looking at payment statistics over the past couple of months and we’ve got a pretty good handle on the spending habits of Kiwis through the festive season.

We’ve looked at a decade’s worth of data comparing December and January to the rest of the year. Plus, to get the full picture, we’ve looked at the whole payments set including cards, cash, cheques, electronic credits/debits and high value. We’ve even looked at the ever-increasing size of Santa’s gift sack. Here’s what we found.

Cash: Kiwis still love cash. Cash in circulation is increasing by about 5% a year, but we know for a fact that cash is being used less and less for payments. The increase in cash is mainly being hoarded somewhere as a way of storing value. However, the festive season is when Kiwis really like to have some cash in their pockets. On average across a decade, the Reserve Bank of New Zealand (RBNZ) pumps out into circulation 11% more cash in Q4 (the October to December quarter) than they do in Q3. The rest of the year RBNZ slowly pulls the surplus cash back into their vault but they never fully recover the Q4 outflow. The unrecovered cash is left out there somewhere as an addition to our hoarded stockpiles.

Cheques and High Value: These payment instruments seem immune to the festive season with no significant change in volumes or values. Bah humbug!

Electronic Credits and Debits: When looking at one decade’s worth of monthly average trends, there is a clear spike in December’s volumes and values. This spike is partially offset by a lower than average January. From 2003-2013, compared to full year averages, December had 5.6% more volume and 10.2% more value. Conversely, compared to full year averages, January had 5.3% less volume and 7.5% less value.

Cards: The real change in Kiwi spending behaviour is seen through card activity. Compared to the rest of the year, we pull cards out of our wallets a lot more for Christmas shopping and the holiday period. On average we make 28% more cards payments in December than the average of the other 11 months. But that doesn’t tell the full story. We’ve looked at the main retailer category groups and the trends differ greatly between them. By comparing December to the average of the 11 other months in that year, from 2003-2013 we have
seen these trends emerge:

  • Christmas shopping sees a massive spike occur in December in the Durables (+63.5%) and Apparel (+56.1%) retailer sectors.
  • Hospitality enjoys a +16.3% spike in December. And while most other retail sectors see a sharp drop off in January, Hospitality continues to enjoy a good January with +13.8%.
  • Spend on Fuel is +9.4% in December, followed by +6.1% in January
  • Consumables such as food are +25.8% in December, followed by +6.2% in January
  • Durables, Apparel and Services all drop right back in January to either average or below average levels.

Santa’s Gift Sack: In December, Santa’s gift sack starts filling up with presents. Mostly these presents are purchased using cards. Every December, we use our cards for more and more purchases, and as a result Santa’s gift sack is getting heavier all the time:

  • In Dec 2003 $4.0 billion was spent using cards
  • In Dec 2008 $5.6 billion was spent using cards
  • In Dec 2013 $7.1 billion was spent using cards


Some of this growth in cards spend can be explained by a larger population, inflation and cards displacing cash (e.g. in 2002 cards were used in 58% of core retail spend, which increased up to 67% in 2010). But mainly, with New Zealand ranked 3rd in the world with 93.8% of adults having a debit card, Payments NZ thinks that Kiwis just like cards...and Santa.

Happy shopping! The Payments NZ team wish you a very merry Christmas and a happy New Year.

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