Shoppers pull back in December despite holiday season demand
Thursday, 22 January 2026
New data from Stats NZ shows electronic retail spending was down by $13 million or 0.2% in December - a month that typically sees sales increase in the lead up to Christmas and warmer summer months.
Spending on apparel and vehicles was down the most in December, when compared to spending in the previous month. Meanwhile spending on hospitality increased by $21m or 1.4%, and spending on fuel increased by $5.5m or 1.1%.
Spending on food was down $3.6m or by 0.1% in December, signalling consumers likely budgeted for less spending on food this season as food prices have increased again.
Spending on durables, items such as furniture and appliances, decreased by $1.5m or 0.1%.
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Electronic Card Transaction data shows cardholders made 195 million transactions across all industries in December 2025, with shoppers spending an average of $58 per transaction.
A total of $11 billion was spent using electronic cards in December.
Year-on-year, retail card spending dropped by 0.5%.
Spending on durables was down 4.3% in December compared to December 2024, and spending on apparel dropped 3% year-on-year.
Retail NZ chief executive Carolyn Young said the December spending figures were “disappointing”.
“The dip in card spending will come as a disappointment to retailers after seeing a 1.6% increase in November, where shoppers took advantage of Black Friday sales. Unfortunately, that spending has not continued into December, a critical sales period for retail with the lead-up to Christmas and Boxing Day sales, which many businesses rely on to support them through the quieter months in the year ahead,” Young said.
“The proportion of credit-card transactions, versus debit card, was also up compared with November, indicating consumers have not had the same levels of disposable income heading into the holiday season. This suggests the optimism we're hearing from businesses is not translating through to shoppers, where the cost of living seems to be a continued stress on New Zealand households.”
Young said retailers were bracing for “a possible rocky few months ahead”.
In an economic note, Westpac said it expected to see retail spending strengthen over the year.
Senior economist Satish Ranchhod said the December dip was softer than Westpac had expected, but the bank believed household spending appetites were starting to pick up, “albeit gradually”.
“December’s small dip in spending followed a solid 1.2% rise in November - likely related to the growing prevalence of November sales events, like Black Friday and Singles Day, which saw consumers bringing their normal holiday spending forward. But even with more spending taking place in November, spending levels largely held up through December, pointing to firmness in spending appetites. This change in shopping habits is likely to be ongoing, and it will take time for seasonally adjusted estimates to account for this.”
Ranchhod said retailers were facing mounting competition from large offshore or web-based stores, and so while households may still be spending, much of that was not with New Zealand retailers.
“We expect retail spending to continue to rise over 2026. While the RBNZ’s easing cycle has likely come to a close, many borrowers are still rolling off earlier higher interest rates and on to lower ones. That will help to support disposable incomes and spending over coming months.”
Any gains, however, would likely be gradual in coming months, with softness in the job market still a drag on spending appetites, he said.