Consumer spending was strong across New Zealand’s retail sector in July, according to Paymark data, with core spending up by 11.4 per cent year on year.

Most sectors saw growth during the month, with the hospitality sector seeing the first signs of growth since February.

And, according to the latest Retail Radar report by Retail NZ, retail confidence is also improving – with 75 per cent of respondents reported feeling “confident or very confident” that the business will survive the next year, compared to 39 per cent in May.

“Sales across the sector were strong in July, up substantially on the previous year, although overall retail sales are down 9.6 per cent since March and the recovery appears to be slowing,” Greg Harford, RetailNZ chief executive, said.

“There are real clouds on the horizon in the short-term, and the good news is not spread equally across the sector, with a significant number of retailers whose businesses continue to be substantially negatively impacted by Covid-19.”

According to Harford, though overall sales grew in July 22 per cent of retailers are claiming their sales fell, meaning certain segments are seeing growth, while others flounder – retailers that rely on tourists are particularly severely impacted, and will be for the foreseeable future.

And while businesses are feeling more confident about surviving the next year, 13 per cent are expecting to cut staff levels once government wage subsidies are discontinued.

“While the recovery from COVID-19 is underway these remain unprecedented times and many challenges remain for retailers. Consumers will be very cautious about spending in the coming months, with the uncertainty an election period brings,” Harford said.

“It is essential to the whole economy that spending continues to grow, and further assistance from government to stimulate the economy, such as tax or GST cuts, is strongly supported by retailers.”