Retail spending edges up again, hinting at cautious recovery

Monday, 15 September 2025

Consumer spending continues its slow climb, marking a third straight monthly rise — driven in part by a growing appetite for retail therapy as the end of the year nears.

An additional $55 million was spent on core retail in August, a 0.9% increase on July’s spend, according to Stats NZ’s electronic card transactions data.

Spending on apparel was up 1.8% or $5.9 million, hospitality spending rose by 1.4% or $21m and spending on durables - things like furniture or appliances - was up 0.5% or $8.9m.

Spending on food rose 0.3% in August, with the country collectively spending an additional $7.1m. Vehicle spending dropped by $1.7m or 0.9% and spending on fuel was down 0.1%.

Westpac economist Satish Ranchhod said more people were willing to open up their wallets with the latest data showed a pick up in discretionary spending - an encouraging sign.

“It's the third increase in a row, and importantly a lot of it was in some of those discretionary spending categories, like hospitality,” Ranchhod told The Post.

“That does show some signs that consumers are starting to open up their wallets again, and we think that there's probably a bit more of that to come. We've had those big cuts in interest rates that's starting to flow through the economy, but there's still a lot of it yet to hit households’ wallets.”

Ranchhod said it signalled an early stage of economic recovery.

While the figures were “encouraging”, Ranchhod said some of that increase in spending could be attributed to “sizeable increases in food prices” and utilities.

“We're also seeing pressure on other costs like electricity, so that is a bit of a drag on spending. But while that is tempering how fast things are going to go, I think the outlook is starting to improve slowly.”

Retail NZ chief executive Carolyn Young said August’s spending increase suggested that a turnaround may be starting for the embattled retail sector.

While it was too soon to say the sector had turned a corner after a tough winter of The small increase in transactions would be heartening for retailers as they prepared for the traditionally busy Christmas season ahead, Young said.

“We’re pleased to see there has been a small increase in the number of transactions, suggesting that consumers are bringing their cards out a little more often.”

“We are hoping this will give retailers confidence to buy stock and retain staff in the run up to the end of the year. Consumers are continuing to be careful with their spending but we want to see these improvements continue.”

Recent months have proved particularly difficult for the sector as consumers remain wary of spending much or two often, particularly on discretionary goods.

A handful of big box retailers have struggled significantly, including furniture and appliance chain Smiths City which was placed into voluntary administration by owner Colin Neale at the beginning of the month after telling The Post he had no choice but to downsize the business following a steep reduction in sales.

Kitchen Things was placed into receivership a month earlier, and many small retailers and businesses have been closing throughout the year.