Our take on the latest Retail trade survey (Mon 23 Feb 2026)
Core retail sales volumes
11 of 13 core industries
South Island
1.5%In December (seas. adj.)
Recorded quarterly rises (seas. adj.)
Continues to lead the recovery
The key numbers...
- Core retail sales volumes, which exclude motor vehicles and fuel retailing, rose for the fifth consecutive quarter in December 2025. Quarterly spending growth continues to strengthen, up from 1.2% in the September 2025 quarter to 1.5% in the December quarter (seasonally adjusted).
- Eleven of the 13 core industries saw a lift in quarterly spending volumes in the December 2025 quarter (seasonally adjusted), up from seven core industries in September. The industries that saw the largest increases in spending volumes from the previous quarter were recreational goods (+5.2%), pharmaceutical and other store based goods (+5.2%), and accommodation (+5.1%).
- However, supermarket and grocery stores continue to struggle, with spending volumes down 1.1% in the December 2025 quarter (seasonally adjusted) – the second consecutive quarterly decline.
- On an annual basis, the South Island continues to outperform the North. Core spending values in the December 2025 quarter were up 6.6%pa in the South Island, compared with 3.8%pa in the North Island. Gisborne remains the only region where spending values continue to decline, down 2.6%pa in the December 2025 quarter compared with December 2024 – the fifth consecutive decrease.
...and our reaction
- Spending growth continues to strengthen and spread to more industries. There is a shift away from spending on food and other groceries towards more durable items, reflecting a recovery in the proportion of households thinking it is a good time to buy a major household item (up eight points in the December 2025 ANZ-Roy Morgan NZ Consumer Confidence survey), albeit from a low base.
- The South Island continues to benefit from the strong primary sector bringing revenue into rural economies. But with an increasing number of homeowners rolling onto lower fixed mortgage rates, the benefits of the recovery are being felt in spending growth across most regions.
- The Reserve Bank held the official cash rate at 2.25% last week, commenting that “risks to the outlook for inflation are balanced”. As noted in our commentary, our concern is that inflationary pressures are already evident in the economic data. Today’s Retail Trade Survey doesn’t offer any surprises – the recovery is slowly taking shape – but it does nothing to assuage our stance that the Reserve Bank should be more attentive to current inflationary pressures.
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Mon 24 Aug 2026
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-0.5% Total retail sales volumes in the June 2026 quarter (seas. adj.)+0.7% Core retail sales volumes in the June 2026 quarter (seas. adj.)+6.5%pa South Island core retail sales in the June 2026 quarterPremium
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Thu 27 Nov 2025
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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