Weak figures for sales made using credit and debit cards in the run-up to Christmas are being seen as an indication that retailers face more tough times, even if this year turns out to be better than last.

Statistics New Zealand yesterday said seasonally adjusted electronic card transactions fell 1.2 per cent in December from November.

For just retail industries, the fall was a seasonally adjusted 0.9 per cent, while core retail, which excludes vehicle-related industries, declined 1.6 per cent. All industries recorded falls, except for a 3.3 per cent rise in fuel retailing which economists attributed to a 5 per cent increase in fuel prices.

Electronic card transactions for durable items - including furniture, hardware and appliances - were down a seasonally adjusted 1.2 per cent, while for consumables, such as food and liquor, the fall was 0.6 per cent.

The decline follows increases of at least 1 per cent in the total value of electronic card transactions for each of the preceding three months.

The actual value of transactions in the core retail series was 3.9 per cent higher than in December 2009. Goldman Sachs economist Philip Borkin said the figures confirmed that the Christmas period had not been joyous for retailers.

After adjusting for the higher rate of GST introduced on October 1, annual growth for total retail spending on electronic cards rose just 1.6 per cent, and annual core spending was up just 0.9 per cent.

For core spending, that rate was in line with the low point reached in the middle of 2008, Borkin said.

He continued to expect that while the labour market backdrop was modestly improving and disposable income growth was solid with the help of personal tax cuts, ongoing deleveraging given weak house prices would keep a lid on spending.

Higher prices for food and petrol were also likely to restrain discretionary consumption, Borkin said.

"For retailers, 2011 looks like it will be another challenging year."

ANZ economist Mark Smith said that on the back of the post-GST slump and weakness in subsequent retail indicators, core retail volumes almost certainly contracted in the December quarter.