Press Office

Auckland, 13 December 2006 - New Zealanders are expected to spend more but also more wisely this Christmas, according to the third annual MasterCard Christmas Spend Survey released today.

While as a nation Kiwis are expected to spend two per cent more this Christmas than last, 92 per cent of the respondents plan to pay off their credit cards within the following three months.

"It's very positive to see that New Zealanders are taking a sensible approach to their Christmas budgets," said Leigh Clapham, executive vice president, Australasia, MasterCard Worldwide. "The signs are there that spending remains strong - which is great news for New Zealand's economy - but our research reveals that Kiwis are expected to be far from reckless with their spending. This year the focus is very much on enjoying the festive season with loved ones."

The survey, conducted by Galaxy Research, is now in its third year and is undertaken to determine trends in consumer spending during the Christmas period. The previous two surveys closely reflected spending patterns over the corresponding Christmas retail periods.

The recent research shows the average Kiwi are expected to spend $922 on Christmas, up two per cent on last year's figure and resulting in an expected national spend of close to $2.76 billion. Those with children are expecting to spend more - with an average expected spend of $1,100 - 21 per cent higher than last year.

Christmas cheer with family and friends is the primary focus for most Kiwis this festive season with one in three expecting to spend more on food and drink than they did last year.

While as a nation we're likely to be spending more on food, drink and travel, in comparison, spending on luxury items such as jewelry, and plasma TVs is likely to be less important for Kiwis this year with more than a third of those surveyed saying they plan to spend less on jewelry, home entertainment and other electronics, computer equipment and home and garden furnishings.

The research revealed that about 1.5 million New Zealand adults plan to use their credit cards for Christmas spending, ringing up about $998 million in sales (36 per cent of total spend). However, most credit card users (92 per cent) expect to be able to pay this off shortly after the festive period.

"Seventy six per cent of credit card users are expected to pay off their credit card bills straight away, using the card for convenience. A further 16 per cent are expected to spread this cost over three months," Clapham said.

"The majority of credit card users (88 per cent) are expected to favor their credit card for its convenience over the festive season but for young consumers their main reason for credit card use will be so they can make purchases online and over the phone," Clapham said.

The nationwide survey of 467 people aged 18 and over was conducted in November 2006. It was undertaken to determine spending trends across seven product categories including food and drink, clothes and shoes, toys, home entertainment and electronics, home and garden furnishings, computer equipment and jewelry.

• 76 per cent of credit card users expect to pay their credit card bill in full after Christmas, and further 16 per cent expect to pay off their credit card within the following three months.
• Of young people aged 18-24 years, 55 per cent expect to spend more this Christmas on food and drink, while 66 per cent expect to spend more on clothes and shoes.
• Expenditure on travel, including flight, petrol and accommodation, is also set to grow this year, especially for the 18-24 year age group.
• Although one in five consumers anticipate spending more on Christmas this year, a similar proportion expect to spend less, compared to 2005.
• Consumers are expected to use credit cards this Christmas as they offer convenience (96 per cent), are accepted almost everywhere (59 per cent), saves carrying cash (63 per cent), can be used online or over the phone (48 per cent) and allows the user to keep track of their spending (41 per cent).
• Kids won't miss out this Christmas either, with the figure higher at $1,100 for those with children and parents expecting to spend 21 per cent more on toys than last year.

The MasterCard Worldwide Christmas Spend survey had a sample size of 467 and was conducted between 1 and 6 November 2006. Galaxy Research, the organization which conducted the research, is one of Australasia's leading qualitative and quantitative research companies.
Key findings from the 2004 MasterCard survey indicated Christmas spending was up for retailers with one in five New Zealanders suggesting they would be spending more, with clothes and shoes being the most popular category. The 2005 survey revealed that retail spending would continue to be buoyant but the focus would be away from "big ticket" items and would instead treat themselves with food and drink.

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 14 billion payments each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard Worldwide serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercardworldwide.com.