The latest inflation figures have come as a further blow to retailers, Retail NZ Chief Executive Carolyn Young said.
The Consumer Price Index has risen to 3.1 percent in the 12 months to December, outside of the Reserve Bank target range for inflation of 1 percent to 3 percent.
“Today’s announcement is further disappointment for the retail sector with continued increases in inflation over the last 12 months, making it difficult for New Zealanders to manage household spending," Young said.
"We know that consumers have seen significant increases in core expenses such as rates, electricity, telecommunications, insurance and grocery prices, which keeps eating away at the confidence of consumers and their ability to get ahead."
Young said that has a direct impact on discretionary spending as witnessed in the 0.5 percent decline in spending for December 2025 that was previously announced.
"The dip in card spending will come as a disappointment to retailers after seeing a 1.6 percent increase in November, where shoppers took advantage of Black Friday sales. Unfortunately, that spending has not continued into December, a critical sales period for retail with the lead up to Christmas and Boxing Day sales, which many businesses rely on to support them through the quieter months in the year ahead."
Young added that the proportion of credit card transactions (versus debit card) was also up compared with November, indicating consumers have not had the same levels of disposable income heading into the holiday season. It suggests the optimism we're hearing from businesses is not translating through to shoppers, where the cost of living seems to be a continued stress on New Zealand households.
"Retailers will be bracing for a possible rocky few months ahead of them, with the potential for rises and falls in spending month-to-month."
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