The sudden fall in petrol prices looks likely to come to the rescue of what was shaping up to be a flat Christmas for retailers.
A rebound in consumer confidence, as measured by Westpac McDermott Miller, in December also augurs well for the sector, analysts said.
Petrol prices, driven solely by the dramatic drop in crude prices, have slumped since their peak in early October.
The national price, according to the AA, is $2.04 a litre for 91 octane petrol and $1.51 for diesel, down from $2.49 and $1.85, respectively, on October 5.
ASB chief economist Nick Tuffley said there had been reasonable - but not spectacular - income growth over the year. Employment growth had also been strong.
Interest rates have been low and consumers' debt servicing costs have drifted down as they refix their mortgages at lower rates.
But he said the "headwind" for retail had been low turnover in the real estate market, and a cooling of house prices in Auckland and Christchurch.
Lower house prices can pour cold water on the so-called wealth effect that encourages spending when the market is strong.
The latest data from Stats NZ showed retail sales stalled over the September quarter, raising doubts about the strength of the economy in the lead-up to Christmas.
However the effect of lower petrol prices - which had had a pronounced impact on spending when they spiked October - could have a beneficial impact now that they have fallen back, Tuffley said.
"The yo-yo for the year has really been fuel prices," he said.
"There were some very noticeable signs in the third quarter when petrol prices rose sharply, when you saw an impact on discretionary spending," he said.
"Some of that is unwinding and it looks like discretionary spending is showing signs of recovery now that petrol prices have fallen quite sharply in a short space of time," he said.
"Heading into Christmas, with petrol prices coming back down, we should have a better December quarter than we did in the third quarter."
Harbour Asset Management portfolio manager Shane Solly said the next few days could be telling for the sector.
"Obviously, the oil price coming back is very helpful," he said.
"Consumer confidence is supportive for an ok Christmas," Solly said.
He said that better technology was helping retailers set their inventory levels correctly.
Retailers will be looking to the all-important Christmas period, and for many it is a matter of make or break, against the backdrop of competition from the online retail giants such as Amazon.
Among the listed retailers, Michael Hill International is still licking its wounds from an ill-fated foray into the United States.
The jewellery retailer said in October that it could "no longer justify the destruction of shareholder value" involved in remaining in the US.
Michael Hill's annual net profit slumped to $4.6m from $32.6m and the company said its move away from a high frequency of "discount-based store events" had larger impact on sales than anticipated.
Michael Hill's share price has slumped to 64c from a peak in January of $1.44.
The Warehouse announced a $22.9m net profit for the year, above guidance and a 12 per cent improvement on the previous year's.
The company said it was mindful of Amazon, and the e-commerce players are also present in the New Zealand market.
"We also see traditional competitors such as Kmart expanding its retail footprint domestically, along with the arrival of the best international apparel retailers such as Zara and H&M."
The Warehouse's share price has been static throughout the year at just over $2.00.
Hallenstein Glasson's group sales for the 12 months to 1 August 2018 were $277.64 million, resulting in a very strong increase of 16.2 over the corresponding period last year.
The clothing retailer's net profit after tax for the year was $27.36 million, an increase of 58.4 per cent over the corresponding period last year.
Sales for first 18 weeks of the new financial year were 4 per cent ahead of the same period last year.
"However, because the December and January key trading months, which contribute such a large proportion of sales and profit for the season, are largely still ahead of us, it is not possible to reliably forecast our results," the company said.
Hallenstein's share price has been on a rollercoaster ride this year, peaking at $6.33 in September 29 and trading this week at $4.14.
Briscoe Group's sales for the 39-week period from 29 January 2018 to 28 October 2018 were $426.0m, an increase of 3.77 per cent on the same period last year.
"As we commence the crucial final quarter we remain confident that we have the right programmes in place to continue to deliver the quality products, service and shopping experience to ensure improved bottom line profit and returns to shareholders," the company said in early November.
Briscoe shares are ending the year where they started - around $3.40.
Kathmandu's latest sales update for the 15 weeks to November 11 showed same store sales growth up by 7.1 per cent in Australia and by 5.2 per cent in New Zealand.
Chief executive Xavier Simonet said the company had good sales growth leading into the key Christmas trading period, and that he expected first-half profit to be strongly above last year.
However, as always, Kathmandu's first half-year result would be highly dependent on the success of its summer sale.
The company's shares started 2018 at $2.42 and traded this week at $2.74.
Smiths City South Island retailer Smith City made an after-tax profit of $1.71m for the six months ending October 31, an increase of 5.9 per cent on last year.
Sales increased 7.3 per cent to $98.3m. Smith City said the outlook for the full year linked to the success of the Christmas trading season.
Smiths shares started the year at 59c and traded this week at 27.5c.