New research from Infometrics has found that anxious consumers have continued to pull back on discretionary spending.
In its latest Retail Trade Survey, Infometrics found that retail spending in the March 2026 quarter was up 4.7 percent pa from the March 2025 quarter. But on a quarterly basis, spending growth, especially discretionary spending, weakened from 1.4 percent in the December 2025 quarter to 1.0 percent in the March 2026 quarter (seasonally adjusted).
Eight of the 13 core industries saw a lift in quarterly spending volumes in the March 2026 quarter (seasonally adjusted), down from eleven core industries in the December 2025 quarter. Spending volumes rose 6.1 percent in accommodation, 2.7 percent in hardware, building and garden supplies, and 2.4 percent in furniture, floor coverings, houseware and textile goods retailing in the March 2026 quarter (seasonally adjusted).
Outside the core industries, the rise in fuel prices is evident with spending values on fuel retailing rising 5.9 percent in the March 2026 quarter (seasonally adjusted) despite retail fuel spending volumes rising only 0.2 percent.
On an annual basis, spending across both the North and South Islands strengthened. Core spending values between the March 2025 and March 2026 quarters were up 7.8 percent pa in the South Island (up from 6.6 percent pa in the December 2025 quarter), and 5.4 percent pa in the North Island (up from 3.8 percent pa in the December 2025 quarter). Only the Marlborough Region saw spending values decline, down 4.2 percent pa in the March 2026 quarter. Spending in Gisborne rose following five quarters of declines.
Rob Heyes from Infometrics said rising fuel prices in March 2026 are showing through in March 2026 quarter retail trade figures with consumers pulling back on discretionary spending and increasing spending on fuel and essential items. Spending on fuel rose as drivers rushed to get ahead of escalating prices at the pump. Spending at supermarkets and grocery stores rose, reversing declines in previous quarters with anxious consumers stocking up on essentials as the Middle East conflict provoked concerns about shortages and broader price inflation.
“Additional spending on fuel and essentials, along with broader nervousness about cost-of-living pressures and the broader economic outlook, saw spending on discretionary items such as recreational goods, clothing, footwear and personal accessories, and liquor fall back,” said Heyes.
“Resilience in spending on durable items such as furniture and hardware, and on accommodation, is a little surprising, but with fuel price rises only kicking in two-thirds of the way through the March 2026 quarter, this resilience might well weaken in the June 2026 quarter.”
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