SPENDING POWER.

Auckland Star, Volume LXV, Issue 2, 3 January 1934, Page 5

SPENDING POWER.

HOW IT IS USED. HIGHER-UNIT PURCHASES. CHRISTMAS SHOPPING LESSON In velocity and volume money is circulating in Auckland in a manner which has encouraged most traders to believe that normal relationships between seller and buyer have at long last been re-established. It is several years since spending in Auckland showed the elasticity which was evident during November and December, the experience of the large business houses over those months being one of sustained improvement in trade. Without exception prominent traders report substantially increased turnovers on the sales for the corresponding period of 1032, and they say the nature of the buying indicates more than ever the restoration of confidence. Increased sales during November and December are attributed in the main to reaction from the exhilarating tone of the wool market, coupled with the unmistakable signs of a generally improving outlook.

I Throughout the shopping hours over 1 the Christmas and New Year periods ; business houses reaped a long-overdue harvest. Assistants sold, customers bought, and there was no haggling over prices. If anything, prices hardened slightly as the result ofi growing demand, but buyers were out to spend, and although values were still keenly sought, "margins," which for three years or so have commanded the closest attention, were largely ignored. 'There was money to spend. Articles for personal use or for Christmas gifts were required.. A transaction was automatic. Passing 'faces in the densely-thronged streets registered the anticipation always associated with Christmas shopping in pre-depression years; and in many of the stores stocks of certain lines were sold out before the rush reached its zenith. "We had an amazing time," said the manager of one large departmental store to-day. "Over the

we broke- all records."

InSuence of Wool Sales. While this is a true picture of the Christmas shopping phase, inquiries establish that it represents the climax of a definite improvement in trade which firms • have recorded right throughout November and December. According to the principals of several of Auckland's I most prominent business houses, the ! improvement, which started in November, became more marked after the wool sales and continued steadily thereafter; and in their opinion the freer spending ofi money was due more to the psychological reaction of improved prices for wool than the actual possession of additional purchasing power. There were indications that the confidence of buyers would be sustained, a state of affairs which would be assured if prices for butter and cheese declined to lag behind the appreciated wool values. A significant feature revealed by the analysis of buying conducted by one emporium which has shown increased sales in all its departments is that of the number of clients who have returned to what is known as bigherunit spending. A tally taken over the two months showed that while there ■was an unusually keen demand for fancy {roods, many buyers purchased lines of furniture, radio sets, gramophones and so forth, indicating their willingness to assume greater obligations in the face oS an outlook from which the psychology of fear was absent.

The seasonal demand for toys was much greater than in recent years, and in this increased business Great Britain and Japan shared the importation honours. German manufactures were conspicuously absent. It was explained by one trader to-day that whereas Germany and Czccho-Slovakia once had tho lion's share of the toy market in New Zealand, they had now been displaced by Japan, as an outcome of the exchange situation and the Dominion's policy of converting foreign invoice values into sterling on the bank rate instead of the Mint par rate basis. While importations of Japanese toys had increased it was true also that those from the United Kingdom had come in in greater quantities than previously, and the experience of retailers was that the demand for the British manufactures was quite substantial.

So noticeable will be the effect of greater buying on existing stocks that importations, which up to four months ago wcro sluggish, should show an

appreciable increase this year. The first effect is likely to be noticeable about April. How the Money Circulates. Auckland's increased spending, of course, has not been confined to trading purchases. Services have been required, and these have been willingly paid for. More people have used the railways for excursions and holiday trips, ferry steamers have carried full complements of holiday-makers, to the beaches and the other handy seaside pleasure resorts, and the trams and private transport and taxi concerns have handled more trafiie than has been offering for some considerable time. The totalisator, which can be regarded as a barometer, has, at the Auckland meetings, revealed that more money is available for that type of "investment," and ready cash has also been available for the many and varied forms of amusement and entertainment which. Auckland has always provided for resident and visitor. If the economic signals are read aright, it would appear that the first waves of returning prosperity are breaking, and that Aueklanders are not failing to come in with the tide.