Retail NZ says the Black Friday-led surge in sales in November did not continue into December and believes retailers will 'be bracing for a possible rocky few months ahead of them'

Retail industry body Retail NZ says a dip in electronic card spending in December "will come as a disappointment to retailers" after a Black Friday-led surge in November.

Stats NZ figures released on Thursday show that seasonally adjusted retail spending fell 0.1% in December, while the actual (not seasonally adjusted) sales figures for the month were down 0.5% on those for December 2024.

Retail NZ chief executive Carolyn Young says, unfortunately, the surge in spending seen in November did not continue 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".

"Durables, down 4.3%, and apparel, down 3%, took the biggest hits compared to spending in December 2024, though consumables did experience a 2% lift which continues a positive trend through most of 2025, much of which will be attributable to inflation and price increases in groceries," Young said.

"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."

Young said 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.

In terms of the detail in the seasonally-adjusted figures for December, Stats NZ said the movements by retail spending category were:

• apparel, down $12 million (3.6%)
• consumables, down $3.6 million (0.1%)
• motor vehicles (excluding fuel), down $3.5 million (1.8%)
• durables, down $1.5 million (0.1%)
• fuel, up $5.5 million (1.1%)
• hospitality, up $21 million (1.4%).

Westpac senior economist Satish Ranchhod said the December figures were "a bit softer than we had expected".

"However, stepping back and looking at the past few months as a whole, we think that households’ spending appetites are picking up (albeit gradually)," he said.

"December’s small dip in spending followed a solid 1.2% rise in November. That earlier rise in spending was likely related to the growing prevalence of November sales events, like Black Friday and Singles Day, which saw consumers bringing their normal holiday spending forward. But even with more spending taking place in November, spending levels largely held up through December, pointing to firmness in spending appetites. This change in shopping habits is likely to be ongoing, and it will take time for seasonally adjusted estimates to account for this."

Ranchhod noted that the only category that saw a material fall in December was apparel spending which fell 3.6%, reversing November's  month's rise.

"As we’ve noted before, competition in the apparel sector is fierce, with local retailers facing mounting competition from large offshore or web-based stores. So while households may still be spending, much of that spending won’t be with New Zealand retailers."

Ranchhod expects retail spending to continue to rise over 2026 and says that while the Reserve Bank's cycle of Official Cash Rate cuts has likely finished [with the OCR at 2.25%], many borrowers are still rolling off earlier higher interest rates and on to lower ones.

"That will help to support disposable incomes and spending over coming months. However, gains are likely to be gradual in the near term, with softness in the job market still a drag on spending appetites."