Retail trade survey

Retail spending recovery gaining traction

27 Nov 2025

Our take on the latest Retail trade survey (Thu 27 Nov 2025)

Core retail sales volumes up 1.2% in September (seas. adj.)

Seven of 13 core industries saw quarterly rises (seas. adj.)

North Island growth starting to follow the South’s lead

Core retail sales volumes, which exclude motor vehicles and fuel retailing, rose for the fourth consecutive quarter in September 2025, as spending rose 1.2% from June 2025 (seasonally adjusted). On an annual basis, September 2025 quarter spending was up 4.2%pa from September 2024, although it’s important to note spending fell during the recession in the June and September 2024 quarters, so the rise is off a low base.
Seven of the 13 core industries saw a lift in quarterly spending volumes (seasonally adjusted). There appeared to be a pick up in durable goods, an early sign that households are gaining back some confidence, with pickups in electrical and electronic goods (+9.8%) and furniture (+1.4%).
On an annual basis, the industries which saw the largest increases in quarterly spending volumes were electrical and electronic goods (+23%pa), recreational goods (+8.1%pa), department stores (+7.6%pa), and accommodation (+5.4%pa).
The economic recovery led by the south continues to show through economic data, with core spending values up 7.3%pa in the South Island, compared to 3.8%pa in the North Island. Growth in spending in the main centres appears to be picking up, with both Auckland (+4.3%pa) and Wellington (+4.0%pa) starting to show better growth.

Annual % change, actual quarterly core retail sales, by region

Our Quarterly Economic Monitor highlighted that the primary sector continues to be the main driver of the economic recovery, but also that the recovery is now getting underway across most regions. Spending growth in all but one of the sixteen regions is positive to see, with growth in some North Island regions beginning to show through.
Although spending has been picking up modestly, core retail spending on a real per capita basis in September 2025 was down 0.3% from 2019 (pre-pandemic) levels, and it was 1.6% below its 2021 peak.
The Reserve Bank cut the official cash rate (OCR) by 25 basis points to 2.25% yesterday in its final review for the year. The main takeaway from the release was that yesterday’s cut seems likely to be the last for this cycle. The 25 basis point cut, along with previous cuts should continue to translate into lower fixed mortgage payments for households, easing financial pressures. A recovery in the labour market into 2026 should help to give households some confidence to spend funds freed up by lower mortgage rates, driving spending growth and the broader economic recovery.

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