“While spending levels have been nudging higher, the details of the October report point to ongoing softness in households’ spending appetites.”
October’s gain was almost entirely related to increased spending on groceries.
“With prices continuing to rise for many essential food items, that’s not really an indication that households are feeling more upbeat,” he said.
More noticeable was the softness in discretionary spending categories, with falls in spending on household durables like furnishings, apparel and hospitality.
“Recent months had seen spending in those categories starting to rise, but that momentum has not been sustained,” Ranchhod said.
By category, consumables (groceries) experienced the largest monthly increase, rising 0.8%.
Fuel consumption was up 0.5%, although fluctuating petrol prices tend to make this category volatile.
Meanwhile, spending in some of the categories that economists look to for signs of rising consumer confidence fell during the month.
Durables (household goods such as appliances) were down 0.1% ($1.5m).
Apparel was down 0.6% ($1.9m), and hospitality spending fell 1.4% ($21m).
In actual terms, cardholders made 181 million transactions across all industries in October 2025, with an average value of $54 per transaction.
The total amount spent using electronic cards was $9.7 billion.
“Interest rates have been falling for well over a year and increasing numbers of borrowers are rolling on to lower mortgage rates,” Ranchhod said.
“That’s been putting money back into households’ wallets. However, households are still reluctant to spend (using cards anyway), with softness in the jobs market likely an important factor weighing on spending appetites.”
That reinforced Westpac’s expectation the RBNZ will deliver another 25-basis-point rate cut at their upcoming policy meeting on November 26.
The subdued nature of the spending data matched both the ANZ card data released on Tuesday and ANZ’s latest Consumer Confidence survey.
ANZ’s card data showed spending was up just 0.1% in October. However, it picked up a higher rate of spending in the durables category.
Meanwhile, ANZ-Roy Morgan Consumer Confidence fell slightly from 94.6 to 92.4 in October, giving up September’s gains.
“Consumer confidence hasn’t budged even as many other economic indicators have improved from their mid-year lows. The reluctance to spend in recent years has hit the retail sector hard,” said ANZ senior economist Miles Workman.
Liam Dann is Business Editor at Large for the New Zealand Herald. He is a senior writer and columnist, as well as presenting and producing videos and podcasts. He joined the Herald in 2003.
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