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New Zealand Retail Sales Data Points to 'Solid Lift' in Consumer Spending, Westpac Says

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New Zealand's retail sales data for the March quarter points to a "solid lift" in consumer spending, advancing a retail sector recovery that started in late 2024, Westpac said in a Friday report.

The country's volume of seasonally adjusted retail sales hit NZ$26.04 billion in the March quarter, up 0.9% from the December 2025 quarter and exceeding Westpac's forecast for a 0.2% increase.

Some of the growth in nominal spending, which rose 2.2% over the quarter and 6.1% from a year earlier, is a result of higher prices, especially for fuel, the bank said.

Strong growth in tourist arrivals buoyed the results, as the volume of spending on accommodation rose over 6% during the quarter. Spending on food and beverage services also increased, while spending on footwear, apparel, and recreational goods fell, possibly reflecting an early reaction to the Middle East conflict, Westpac said.

Given the impact of the Middle East conflict, the current quarter will probably be "a much tougher one for retailers, especially those selling discretionary items," the bank said, adding that the economy's second-half performance will depend on how the conflict evolves and how New Zealand's central bank responds to a spike in inflation.

Westpac continues to anticipate gross domestic product growth of 0.8% in the March quarter.

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