Shoppers spent more in the final quarter of 2025.
The total volume of retail sales increased by $239 million (0.9%) in the December 2025 quarter compared with the September 2025 quarter, according to figures released by Stats NZ today.
The figures are adjusted for price inflation and seasonal effects.
Nominal spending rose by 1.4% over the quarter and was up 4.9% on the same time a year ago.
“Spending on discretionary items helped drive an overall increase in retail activity,” economic indicators spokeswoman Michelle Feyen said.
“Pharmaceutical and other store-based retailing, electrical and electronic goods, and hardware, building and garden supplies saw the largest increases in activity this quarter.”
Twelve of the 15 retail industries had higher sales volumes in the December 2025 quarter compared with the September 2025 quarter.
Importantly, that increase wasn’t just the result of price increases, Westpac senior economist Satish Ranchhod said.
“The amount of goods that consumers are actually taking home was up 0.9% in December quarter and is up 4.4% over the past year,” Ranchhod said.
“That was above our and market forecasts for a 0.6% rise.”
This was the fifth quarter in a row that we had seen a solid rise in retail spending, he said.
That corresponded to the period over which the Reserve Bank (RBNZ) was cutting the Official Cash Rate (OCR).
Looking under the surface, the increase in spending had been centred on discretionary spending areas, which tended to be more sensitive to interest rates, Ranchhod said.
“For instance, spending on electronics, furniture and hardware were all up 2% over the past quarter. We also saw gains in spending on recreational items (+5%) and clothing (+3%).”
On top of increased spending on goods, spending on hospitality and dining out was also climbing, Ranchhod said, although some of that reflected increased spending by tourists.
The only areas where spending fell in the December quarter were vehicle sales and grocery spending.
In the case of groceries, some of that decline may have reflected a shift to dining out.
The fall in vehicle sales followed a big rise in the previous quarter.
“While the pickup in spending is an encouraging sign for retailers, in some cases consumers are actually purchasing items from low-cost online, offshore retailers,” Ranchhod said.
“As a result, many domestic retailers are still facing tough trading conditions. This is a particular issue in sectors like apparel.”
Broadly, though, the outlook was positive.
“The RBNZ has signalled that the easing cycle has come to an end. However, many households are still rolling off earlier, higher fixed mortgage rates and are refixing and lower at ones, in some cases, at rates that are 100 to 200bps lower. That process will continue for several months yet,” Ranchhod said.
“And the related easing in average borrowing costs will help to support spending through 2026.”
Looking around the country, spending was up in most regions.
Twelve of the 16 regions had higher retail sales values in the December 2025 quarter compared with the September 2025 quarter, after adjusting for seasonal effects.
Sales in the South Island increased by 2.3% ($180 million) to $7.9 billion, while sales in the North Island increased by 1.5% ($341m) to $23b.
“Hawke’s Bay and Canterbury regions had the highest percentage increase in retail sales this quarter, relative to the previous quarter,” Feyen said.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
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