Weak Sales Volumes, Unlikely To Derail Further RBNZ Tightening

Q1 retail sales volumes fell a larger-than-expected 1.4% q/q in Q1 to be down 4.1% y/y, as significant tightening and cost-of-living pressures weigh on spending. Q4 was revised down to a fall of 1% q/q from -0.6%. Real retail sales have fallen in 4 of the last 5 quarters. While very weak, this data is unlikely to derail the RBNZ from hiking again at today’s meeting. We’re expecting 25bp (see MNI RBNZ Preview here.)

• Weakness was driven by hardware & building supplies (-13% y/y) and motor vehicles (-7.5% y/y). Reflecting the tourism recovery, accommodation rose 19% y/y and food & beverage services +14% y/y.