Average annual core retail price inflation turned positive for the first time in nearly four years this March.
Core retail price inflation, which excludes expenditure on motor vehicles and fuel retailing, increased to 0.1% in the year to March, up from -0.2% the same period last year. Total average retail price inflation, which includes spending on vehicles and fuel, was at -0.8% in the 12 months to March this year, up from –0.9% in the same 12 month period the previous year.
The rise, albeit a very small one, is a reversal of the overall downward trend seen since late 2011, where it has been negative (both total and core retail inflation) since mid-2014.
The deflation seen over the last couple of years has largely been influenced by lower oil prices, though this is now starting to turn around. Fuel retailing sales revenues have been picking up over the last year however, and together with motor vehicle and parts retailing, are up 5.8% on a year ago.
Overall, the trend reversal has been led by growth in combined non-store and commission-based retailing of 8.3% over the year to March, and also expenditure on furniture, floor coverings, houseware and textile goods retailing. Department store retailing saw a boost of nearly 7% over the period, while expenditure on bars, food, and accommodation grew just over 5%.
Auckland remained the forerunner in terms of annual regional growth in retail sales, with 12.2% growth in core retail sales in the year to March, and 8% growth in total retail sales. Canterbury was second with 8% core retail sales growth and just under 4% total retail sales growth, while Wellington managed 11% core retail growth but only 0.8% total retail sales growth.
Notably, these increases in retail price inflation have been coupled with growth in sales volumes as well, resulting in solid revenue growth.