New Zealanders increased spending on debit and credit cards in February, led by gains in hospitality and apparel as low inflation makes households more relaxed about their consumption.
The value of core retail spending, which strips out spending on fuel and vehicle related items, rose 1.2 per cent to a seasonally adjusted $3.94 billion last month, accelerating from January's revised 1 percent gain, Statistics New Zealand said.
Spending on hospitality climbed 2.8 per cent to $601 million last month, while apparel expenditure rose 2.7 per cent to $294 million, the highest level it has been since December 2013.
Spending on consumables, which is the largest measure in the series, was static from January, at $1.69 billion, while durables rose 1.3 per cent to $1.15 billion.
"Retail electronic card spending was stronger than we expected in February - even more so when we consider that the rise in petrol prices over the month had a smaller impact than we assumed," said Westpac Banking Corp senior economic Michael Gordon in a note.
"The underlying pace of growth has accelerated, in keeping with our view that cheap fuel, low mortgage rates and continued rises in house prices will boost consumer confidence and spending over 2015."
New Zealand consumer confidence has remained elevated as cheap credit costs and negligible price increases make it easier for households to lift their spending.
Today's data showed the first increase in card spending on fuel in four months as global oil prices rebound from last year's decline.
Spending on fuel rose 0.8 per cent to $665 million, still lower than 2014 levels, and lifted total retail spending 1 per cent to $4.74 billion.
Total spending, which includes non-retail industries and services, rose 0.4 per cent to $6.25 billion.
On an unadjusted basis, core retail spending rose 6.9 per cent from February a year earlier to $3.61 billion, with hospitality up 12 per cent to $786 million.
Consumables rose 6.4 per cent to $1.57 billion, durables advanced 5.2 per cent to $1 billion and apparel increased 1.2 per cent to $241 million.
Total retail sales rose 3.8 pe rcent to $4.38 billion from a year earlier. Total spending increased 3.3 per cent to $5.91 billion.
The average value per transaction was $51, up from January's $50.
Spending on debit cards made up 53.7 per cent of transactions, down from 54.9 per cent the previous month.