NEW ZEALAND BUSINESS NEWS
Empowering Kiwi Businesses
Electronic card spending across New Zealand retailers fell for a third consecutive month in October, according to Statistics New Zealand’s electronic card transactions. Retail spending was down 0.7 per cent, or $47 million, on September, a steeper decline than the 0.4 per cent monthly fall recorded in September.
The figures matter to any business that takes card payments, because they show where households are choosing to hold back. Total spending on electronic cards across all industries came to $9.6 billion for the month, from 173 million transactions at an average of $56 each. A year earlier, the average transaction was $54.
Stripping out fuel and motor vehicles, core retail card spending fell 1.2 per cent, or $73 million, in October compared with September. That was a much larger drop than the 0.7 per cent decline in core retail spending reported a month earlier, and it marks the third consecutive monthly fall in this measure.
The weakness was concentrated in categories households can postpone. Durables such as furniture and appliances fell 2.1 per cent, or $34 million, while hospitality was down 1.6 per cent, or $23 million. Consumables slipped 0.3 per cent, or $7.5 million, and apparel fell 0.7 per cent, or $2.2 million. Motor vehicle spending excluding fuel dropped 2 per cent, or $3.8 million.
Fuel was the exception, rising 4.8 per cent, or $25 million, in September. That was the third consecutive monthly lift for fuel spending, but it fell well short of the double-digit increases in petrol and diesel prices over the same period.
The gap between fuel spending and fuel prices is the clearest signal in the data. When prices rise faster than motorists’ spending, the difference is volume: people are buying fewer litres, which points to drivers cutting back on trips where they can.
That leaves less in the household budget for everything else. Spending on durables, hospitality, and apparel has now fallen for three months running, and the annual comparisons are weaker still. Compared with a year earlier, durables spending was down 2.4 per cent, hospitality was down 4.4 per cent, and apparel was down 3.2 per cent.
The labour market is adding to the restraint. New Zealand’s unemployment rate rose to 5.7 per cent in the September quarter, with 174,000 people out of work. The jobless rate last sat at that level in the September 2015 quarter.
For retailers and hospitality operators, the pattern is familiar: customers are still spending, but they are prioritising essentials and delaying bigger purchases. The average transaction value of $56 is higher than a year ago, yet the dollars moving through the till are falling once inflation is taken into account.
Fuel is the swing factor. A tank of petrol is a fixed cost for most households, and when it rises it comes out of the same budget that would otherwise go to a restaurant meal, a new appliance, or a winter coat. Businesses in discretionary categories should expect that trade-off to persist while pump prices stay elevated.
The currency is adding a second layer of pressure. A low New Zealand dollar supports incomes in regions exposed to the primary and tourism sectors, but there are limited signs that this is flowing through to the rest of the economy. It is also feeding into inflation, further eroding household purchasing power.
Spending is expected to stay soft for the remainder of 2026. A gradual recovery is forecast for 2027, as cost-of-living pressures ease and the labour market improves, but the October data offers little evidence of that turning point yet.
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