New Zealand’s latest retail trade figures present a mixed economic picture, showing modest overall sales growth alongside a squeeze due to elevated inflation.
Data from Stats NZ highlights a widening gap across retail categories, with annual inflation remaining above 4 per cent. Low single-digit sales growth indicates that retailers are effectively seeing sales contract in real terms.
“A handful of strong sectors are delivering standout performances, but behind those numbers, a significant portion of retail is bumping along below inflation,” said Retail NZ CEO Carolyn Young.
The electronics category led growth, rising 23.5 per cent ($213 million) compared to the same period last year to reach $1.12 billion. Young said that the steady performance in this category is likely from consumers’ interest in replacing tech devices purchased during Covid, combined with growing favour for AI-powered devices.
Home and health segments also posted solid gains, led by pharmaceuticals with a 13.1 per cent increase, while hardware and building supplies expanded 9.5 per cent, and 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.
However, core sectors struggled to match inflation metrics. Supermarkets recorded a 2.6 per cent increase, recreational goods rose 2.7 per cent, and department stores logged a 0.6 per cent gain.
Meanwhile, total fuel expenditure surged 25.1 per cent from $550 million to $2.74 billion, accounting for a significant portion of household budgets and limiting consumer spending in discretionary retail categories.
Regionally, Auckland recorded a 6.8 per cent increase, while Canterbury, Otago, and Southland helped offset softer performance elsewhere in the South Island.
In addition, data from POS provider Lightspeed indicates notable spending pullbacks in specific tourist hubs, including Queenstown.
According to Retail NZ, while select product segments continue to report positive movement, broader retail activity reflects widespread revenue pressure as store owners navigate elevated operational costs and shifting consumer habits.
Looking to the upcoming election, retailers are calling on political parties to address cost-of-living pressures, stimulate economic growth, control inflation, and support local commercial districts.
