Retail spending dips as Kiwis tighten belts in May

Retail spending in the core industries fell by 0.2% in May.

Kiwis remain hesitant to open their wallets and spend, according to Stats NZ’s latest electronic card data.

Card spending in the retail industries fell by 0.2% ($9.9 million) in the month of May compared to April.

Likewise spending in the core retail industries also fell by 0.2% ($11 million).

Looking at the specific retail categories, motor vehicles (excluding fuel) reported the largest growth month-on-month, up by 2.6% or $5m.

Hospitality reported a minor bump in the month, up 0.1% or $1.7m.

The apparel category did report a very slight rise of 0.1% ($0.2m), but is still behind after spending in March and April fell a combined 4.1%.

But the consumables category saw a slight decrease in spending of 0.1% ($1.6m) and spending on durables in May also fell, down by 0.5% or $8.1m.

The standalone fuel category reported the biggest spending drop, falling by 2.4% ($12m).

Westpac senior economist Satish Ranchhod said the result was weaker than expected. Photo / Greg Bowker

Westpac senior economist Satish Ranchhod said the fall in petrol prices should have put more money back into people’s pockets to spend elsewhere.

“New Zealanders have kept their wallets shut over the past month.

“Retail spending fell 0.2% in May, with spending levels effectively tracking sideways for the past three months now.”

The non-retail (excluding services) category increased by 1.5% ($34m) from April 2025.

That category includes medical and other health care, travel and tour arrangement, postal and courier delivery, and other non-retail industries.

While the services category, which includes repair and maintenance, and personal care, funeral, and other personal services, fell by 0.2% ($0.7m).

The total value of electronic card spending, including the two non-retail categories (services and other non-retail), increased from April 2025 by 0.3% or $31m.

In actual terms, cardholders made 166 million transactions across all industries in May 2025, with an average value of $54 per transaction.

The total amount spent using electronic cards was $9.0 billion.

Softness persists

Ranchhod said uncertainty about the economic outlook (especially global trade) may have prompted some households to hold off making major purchases for now.

“One factor that will be constraining many households’ spending is the continued rise in food prices, with the cost of many household basics like butter and milk rising sharply in recent months.

“That’s especially important for many families on lower incomes, with those higher prices for food meaning there’s less available to spend in other areas.”

He believes that retail spending will remain “soft for a while yet”, and hopes that the repricing of nearly half of all mortgages in the next six months could help.

“Even so, as the softness in today’s spending figures highlights, it looks like recovery will be gradual.”

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