Retail Spending Remains Weak

The rise in Q1 real retail sales is in contrast to recent weak activity indicators thus it may be pay back for Q4’s 1.8% q/q drop. This was the first quarterly increase since 2021. They rose 0.5% q/q with core sales up 0.4%. With consumer confidence declining sharply over 2024, household expenditure is likely to remain soft.

• The improvement was fairly broad based across regions and Stats NZ reported an increase in 9 of 15 retail sectors.
• The largest rises were recorded in food services +2.2% q/q, motor vehicles +1.1%, recreation goods +4.7% and accommodation +4.1%. Household durables remained weak.
• Retail sales volumes were still down 2.6% y/y while the population grew 2.5% y/y showing a significant drop in spending per person. Core sales fell 1.7% y/y.