The New Zealand dollar rose to 79.82 US cents from 79.62 cents immediately before the numbers were released.
ASB Bank economist Daniel Smith said the retail sales lift was "a little stronger than our central forecast but not all that surprising. Even more encouragingly, core (ex-auto) retail sales rose by 2.3 per cent over the quarter."
Strength was focussed in the sectors that were expected - primarily those related to tourism and the housing market.
"Overall, strong consumer confidence, low interest rates and rising house prices should continue to support spending," said Smith.
Pricing pressures in the retail sector remained very subdued, he said.
"However, there is evidence, both in this data and in the Q2 CPI data, that some retailers are cutting back on discounting. The slightly lower NZ dollar should also push up the prices of some imported goods. Pricing pressures are likely to increase, but price growth will most likely remain fairly subdued. We continue to expect the OCR to remain on hold until March 2014."
Electronic cards data, which accounts for about two-thirds of retail sales, had already indicated household spending will likely make a bigger contribution to economic growth in the second quarter, while inflation figures showed retailers trimmed their level of discounting in the quarter, with 14 per cent of stock sold at a lower price compared to 16 per cent in the March period.
The volume of core retail sales, which strip out vehicle-related spending, rose 2.3 per cent to $13.95 billion in the quarter, and the value increased 2 per cent to $13.87 billion.
The volume of spending on fuel fell 5 per cent to $1.59 billion for a 7.5 per cent decline in the value to $1.86 billion, while the volume of purchases of vehicles and parts increased 3 per cent to $2.41 billion, for a per cent increase in value terms to $2.42 billion.
Spending on hardware, building and garden supplies rose 3.7 per cent in volume terms to $1.33 billion and 4 per cent in value terms to $1.35 billion, while furniture, floor coverings, houseware and textile spending advanced 5.4 per cent in volume terms to $502 million and 3.2 per cent to $494 million in value terms.
Bubbling property markets in Auckland and Christchurch, which are suffering from a limited supply of new housing, have been under the microscope as the Reserve Bank monitors the risk of rising household credit spilling over into consumer spending.
Today's figures show seasonally adjusted retail sales rose above $4,000 per head of population for the first time since September 2007, at $4,016 in the June quarter.
Retail stocks at the end of the quarter rose 0.5 per cent to $6.35 billion from a year earlier, led by a 23 per cent increase in non-store and commission-based retailing to $113 million, and an 8.5 per cent lift in supermarket and grocery store stocks to $648 million.
Auckland was the biggest gainer across the regions with actual sales up 5.8 per cent to $6.08 billion in the June quarter from a year earlier, followed by a 5.1 per cent lift in Canterbury to $2.4 billion. On a seasonally adjusted basis, Canterbury retail sales rose 0.3 per cent and Auckland gained 1.6 per cent.
