The market consensus was for a rise of about 19 per cent.
While the quarter's rise didn't quite make up for the historic fall of 15 per cent ($3.6 billion) in the Covid-19-affected June 2020 quarter, it did take retail sales figures for the 12-month period back to roughly the same level as the previous year.
The total retail sales value for the 12-month period from October 2019 to September 2020 was $97.6b, down 0.2 just per cent ($172 million).
Sales for the same period from 2018 to 2019 were $97.8b, up 4 per cent ($3.7b).
"A strong September quarter has contributed to the year-ended sales coming in just shy of last year's value," retail statistics manager Sue Chapman said.
Even in a sea of "better than expected" data, it is incredible to think that Covid managed to put such a small dent in retail spending and consumer confidence.
There were particularly large increases in spending on household durables, building supplies and spending in department stores.
"Spending in those areas has been boosted by the increased amount of time New Zealand families are spending around the home," said Westpac senior economist Satish Ranchhod.
Car sales rebounded 47.7 per cent, in line with the 50 per cent climb in car registrations over the quarter, and the highest level on record.
Spending on hospitality also rebounded in the September quarter. However, it remained around 5 per cent below pre-Covid levels.
In large part, that was due to the ongoing closure of the borders and continued restrictions on international tourists, Ranchhod said.
"The only area where we did not see a rise was spending on grocery foods, which fell by 2.9 per cent over the quarter. This likely reflects that many households chose to eat out again when health restrictions were lifted."
Fourteen of the 16 regions saw rises in retail sales values in the September 2020 quarter compared with the September 2019 quarter, the figures show.
The Auckland region had the largest dollar-value increase this quarter, up 3.6 per cent ($315m). Canterbury had the next largest increase in dollar terms, up 9.3 per cent ($281m).
These increases were followed by Waikato, up 12 per cent ($266m), Wellington, up 9.3 per cent ($213m), and Bay of Plenty, up 11 per cent (168m).
"While Auckland recorded the largest dollar-value increase, in percentage terms the increase was lower than that for other main regions, partially due to a further lockdown period of levels 3 and 2 from August 12," Chapman said.
Ranchhod said the strong sales figures pointed to the likelihood of a stronger than expected final GDP figure for the quarter.
Westpac is currently forecasting a 12 per cent quarterly rise.
ASB senior economist Mark Smith said early signs suggested "the strong pace of retail momentum has continued into the December quarter".
"The resurgent housing market, continued nest-building by households and resilient domestic demand should keep some tills ringing," he said.
"However, climbing joblessness, anaemic wage growth, increasing headwinds from fewer overseas tourists, a still uncertain economic outlook and stock shortages for retailers may still partly rain on the retail sector parade and dampen household exuberance."
With large increases in spending on durable items in recent months, it wouldn't be surprising to see some easing in the pace of spending over the coming months, Ranchhod said.
"Nevertheless, we expect spending levels will remain firm through the holiday shopping season, supported by continued low-interest rates and the related strength of the housing market. The labour market has also been more resilient than expected."
Shortages of some goods (such as household furnishings) could restrain spending levels, or mean that the usual holiday price discounts are more moderate than usual.
