New Zealand householders spent 5.6 per cent more over the September quarter as compared to the previous year, according to Kiwibank’s Household Spending Tracker.

However, the company found that the volume of transactions fell by 5.2 per cent, indicating that New Zealanders were paying more for less, due to the rising cost of essentials.

Supermarket spending rose, both in volume and value. While grocery trips were up 5 per cent, carts were found to be 11.2 per cent more expensive, indicating higher food prices.

“Spending on utilities jumped an eye-watering 19.3 per cent, underscoring the squeeze from rising energy and council costs,” said Kiwibank’s senior economist, Mary Jo Vergara.

Spending at cafes rose 5.5 per cent in terms of value, while the number of visits rose just 1.4 per cent.

“Retailers, however, are feeling the chill. Spending on clothing and footwear fell 4.1 per cent, and transactions declined even further by 6.1 per cent, despite widespread discounting,” said Vergara.

Housing-related spending saw a healthy increase, with home content and furnishings spending increased 3 per cent, spending on electronics rose 6.9 per cent, and renovations were up 3.8 per cent.

“Falling interest rates are freeing up disposable incomes and may be signalling that the housing market is stirring back to life,” said Vergara.

“While households are still grappling with higher costs and job insecurity, there’s reason for cautious optimism heading into the summer months. The pressure on household budgets hasn’t disappeared, but the tide is starting to turn.

“As interest rates continue to fall and confidence slowly rebuilds, we expect to see a gradual lift in spending – especially with Black Friday, Christmas, and Boxing Day just around the corner.”