New Zealand first-quarter retail sales volumes rose at the slowest pace for three quarters, missing economist expectations.

The volume of retail sales increased a seasonally adjusted 0.8 per cent in the three months through March from the December quarter, Statistics New Zealand said. That lags behind the 1 per cent forecast in a Reuters poll of economists. Retail sales volumes for the December quarter were revised lower to 1.1 per cent from 1.2 per cent. Core retail volumes, which excludes the more volatile vehicle-related industries, increased 1 per cent in the March quarter, the agency said.

Some 11 of the 15 industries had higher sales volumes in the latest quarter, with the largest increased in electrical and electronic goods retailing, which grew 3.8 per cent, online and commission-based retailing which gained 10 per cent, food, and beverage services up 1.3 per cent, and clothing, footwear and accessories ahead 1.7 per cent. That was offset by a 3.8 per cent decline in specialised food retailing and a 0.6 per cent fall in liquor sales.

"Following solid gains through the latter part of 2015, retail spending growth eased off a bit in early 2016," Westpac Banking Corp senior economist Satish Ranchhod said in a note. "The moderation in retail sales growth in early 2016 isn't too surprising. Late 2015 saw strong growth in spending on durable items such as hardware and furnishings, and it's normal to subsequently see a bit of a softening."


Westpac's Ranchhod said the report highlighted that inflation in the economy remains subdued.

On an unadjusted basis, the volume of retail spending rose 4.8 per cent in the March quarter, compared with the same quarter in 2015. That's ahead of the 3.9 per cent gain expected in the Reuters poll of economists.

The value of actual retail sales increased 4.7 per cent to $20.16 billion.

Stripping out vehicle-related spending, the volume of core retail sales rose 4.7 per cent, while the value gained 5.1 per cent.

Retailers' inventories were 3 percent high at $7.23 billion at March 31 compared with the year earlier, with core retail stocks up 3.2 per cent.