TCF POST Desk
The retail sector in New Zealand is facing a challenging landscape as data reveals a significant decline in apparel spending, even as overall core retail figures show marginal growth.
According to the latest electronic card transaction data from Stats NZ, spending on apparel fell by 4.2 per cent in June 2026 compared to the same period last year, dropping from NZ 305 million. This marks the fourth consecutive month of decline for the category, which also saw a sharp month-on-month decrease of nearly NZ$30 million.
Retailer Sentiment and Price Pressures
The retail environment remains difficult, with Retail NZ CEO Carolyn Young highlighting the compounding pressure on businesses.
“Apparel again took another blow… even hospitality took a 1.4 per cent tumble despite seeing a reasonable lift in spending in May,” said Young.
With spending subdued, Young noted that retailers are being forced to reconsider pricing strategies despite facing rising operational costs.
This cautious outlook persists even as the New Zealand Institute of Economic Research (NZIER) reported that 41 per cent of firms raised prices in the June quarter—the highest level since September 2023—with 54 per cent signaling plans to increase prices in the upcoming September quarter.
Core Retail Trends
This downturn in apparel has weighed heavily on total core retail spending—which excludes cars, fuel, and services. Core retail grew by just 0.4 per cent to NZ$5.78 billion.
While the number of transactions across core retail rose by 1 million year-on-year to 124 million, this figure represents a decline of approximately 9 million transactions compared to the previous month.
Fuel Spending Surges
Consumer spending appears to have shifted toward essential categories, most notably fuel. Fuel spending reported its fourth consecutive month of double-digit year-on-year growth, rising 11.3 per cent in June—an increase of roughly NZ$50 million to a total of NZ$490 million.
Looking ahead, the retail sector remains hopeful for a turnaround; the Reserve Bank has signaled an expectation for economic growth to return in the September quarter, providing a potential light at the end of the tunnel for local businesses.