New Zealanders trimmed their retail spending on credit and debit cards last month, a sign that many consumers are still focused on reducing debt.

Transactions at retailers fell 0.8 per cent,seasonally adjusted, in May from a month earlier, according to Statistics New Zealand. Core retail spending, which excludes fuel and auto-related industries, slipped 0.1 per cent.

Consumers have been the laggards in New Zealand's economic recovery, which Reserve Bank Governor Alan Bollard yesterday said was progressing at a faster clip than expected. The ANZ-Roy Morgan Consumer Confidence survey for May showed signs of recovery in the domestic economy had not kick-started spending, with more people deeming it a bad time to buy a major household item.

"The recovery in retail spending is occurring at a gradual pace," said Christina Leung, economist at ASB, in a note.

"The RBNZ had highlighted at the June MPS the continued high level of household debt, which will constrain retail spending over the coming years. Nonetheless, there are encouraging signs of an improvement in households' discretionary spending."

Total electronic card transactions edged down 0.1 per cent last month, the figures show. Fuel retailing dropped 4.1 per cent in May, the first decline since July 2010.