Retailers in New Zealand need a “significant lift” in consumer confidence before the busy Christmas sales period after new sales figures show weak spending in September.

Paymark’s figures prompted Retail NZ to express caution over the economic environment. Data showed that spending on core retail transactions in September had fallen by 1.3 per cent on the year prior. Spending at fuel outlets was up 35 per cent year on year.

“These figures reinforce what retailers have been telling us: households remain cautious, and there simply isn’t a lot of spare money available for discretionary spending,” Retail NZ CEO Carolyn Young said. 

“Rising fuel costs and interest rates are adding further pressure to household budgets; when Kiwis have to put more money towards putting petrol in the tank and their mortgage repayments, something else has to give. 

“Unfortunately for many retailers, that means shoppers delaying or foregoing the discretionary purchases that businesses rely on.”

Young said that the uncertainty of the general election in early November is contributing to caution among consumers.

“Retailers are now heading into their most important trading period of the year, so they will be looking for signs that shoppers are ready to loosen the purse strings as we get closer to Christmas,” she added.