Supermarket sales are growing, but slower than inflation

Supermarkets, recreational goods and department stores all grew below inflation. (Source: Pexels)

By Uyen Duong Aug 26, 2026

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Several retail sectors have reported quarterly sales growth – but the figures mask a real-terms squeeze for many retailers, with annual inflation above 4 per cent, according to Stats NZ’s Retail Trade Survey.

Electrical and electronic goods recorded the highest sales growth, with sales up 23.5 per cent from the June quarter last year, an increase of $213 million to $1.12 billion.

Retail NZ CEO Carolyn Young said the result could reflect a replacement cycle following increased technology purchases during Covid-19, as well as demand for AI-enabled devices.

Other categories also recorded growth. Pharmaceutical sales increased 13.1 per cent, hardware and building supplies rose 9.5 per cent, while furniture and housewares increased 9.1 per cent.

“Major arrivals like Ikea and a growing appetite for designer furnishings are clearly fueling momentum in home upgrades,” Young said.

Supermarkets, recreational goods and department stores all grew below inflation. Sales increased 2.6 per cent for supermarkets, 2.7 per cent for recreational goods and 0.6 per cent for department stores. Fuel sales increased 25.1 per cent, or $550 million, to $2.74 billion.

Young said fuel costs continue to account for a large share of household budgets, limiting what consumers have left to spend on discretionary retail.

Sales also varied across regions. Auckland recorded sales growth of 6.8 per cent, while Canterbury, Otago and Southland offset lower growth in other parts of the South Island. Recent data from POS provider Lightspeed, which tracks card terminal transactions, also showed localised declines, including in Queenstown.

“A handful of strong sectors are delivering standout performances, but behind those numbers, a significant portion of retail is bumping along below inflation,” Young said.

Retail NZ said the data points to differences in retail sales across sectors and regions. The organisation is calling on parties during the election to address cost-of-living pressures, support economic growth, bring inflation under control, reduce unemployment and support high streets.