Iran conflict and wild weather dampen March spending in regional divide

Retail spending in March started strongly, but ground to a halt as the conflict in Iran grew.

Retail spending through core merchants started strongly in March before falling to year-ago levels as the impact of the war in Iran hit consumers’ wallets.

Worldline NZ’s payments network recorded spending of $3.98 billion across last month, up 0.5% on March 2025 after adjustments for merchants coming and going from the network.

Worldline NZ chief sales officer Bruce Proffit said the weak spending growth over the month was likely influenced by the war’s impact on fuel prices, with some additional regional effects from wet weather.

“Spending growth was up 2.9% in the first weekend of March (February 28 to March 1), around the time of the initial attacks on Iran. By the last weekend of March (28-29), spending at core retail merchants was barely 0.1% above year-ago levels.

“Meanwhile, spending at fuel outlets in Worldline NZ’s network had risen over the month to be 33.0% above year-ago levels by the last weekend.”

Unleaded 91 and 95 petrol prices rose by roughly 26% over the month, while diesel prices rose roughly 70%.

ANZ’s monthly Truckometer - which measures light and heavy traffic volumes - was also released today. The Light Traffic Index fell 2.4% in March but ws still up 3.6% year on year.

Light traffic (motorbikes, cars and vans) is generally a good indicator of the state of demand, as opposed to production.

It typically provides up to a six-month lead on momentum in the economy, with variation reflecting discretionary spending on outings, movement of couriers and tradespeople.

“The monthly move isn’t unusually large, particularly given it came off a strong lift in February,” ANZ chief economist Sharon Zollner said.

“But the fall may reflect people choosing to drive less as fuel prices increased over the month.”

The Heavy Traffic Index still recorded a slight rise for March, up 0.4%.

That suggests there was still some momentum in the economic recovery.

Heavy traffic data (mostly trucks) provides a steer on production GDP in real time, as it captures both goods production and freight associated with both wholesale and retail trade, as well as exports, Zollner said.

Worldline’s Proffit noted that while the increase in fuel spending was the driver at the start of the month, the slowdown towards the end was likely a result of continued spending growth in food and liquor stores compared to hospitality and other core retail merchants.

He said the pattern was consistent with tight budgets affecting discretionary spending.

Weather also played an important part, with heavy rainfall towards the end of the month reducing spending in regions such as Auckland/Northland, Bay of Plenty and Gisborne.

Annual spending growth for March was highest in Palmerston North, up 3.8%; Nelson, up 4.2%; and the West Coast, up 3%.

Spending declined the most on an annual basis in Wairarapa, down 2%, and Gisborne, down 1.7%.

Spending in the main centres was mixed across the board, with Auckland annual spending growth falling 0.6%, Waikato lifting by 2.6%, Wellington falling 1%, and Canterbury up 1.3%.

The data from Worldline is a precursor to Stats NZ’s broader electronic card spending data, due out on April 17.

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.

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