Consumer spending across New Zealand stayed below last year’s levels in August and September, with households squeezed by rising petrol prices, higher interest rates and bad weather.
Radio NZ reported that figures from payments network Paymark show core retail spending reached $3.7 billion in August, a drop of 1.8 percent compared with the same month a year earlier. In September, spending totalled $3.57 billion, down 1.3 percent on the year before.
Paymark chief sales officer Bruce Proffit said consumers had been dealt three “tough knocks” that likely contributed to the softer levels of consumer spending.
He pointed first to petrol prices, which began climbing again in July before jumping sharply in mid-September. Spending at fuel outlets through Paymark was running 35 percent ahead of year-ago levels in the week ending 30 September, driven mostly by higher prices but also by an increase in the number of transactions.
Secondly, it was noted that interest rates had risen over the past three months. This has been as a result of both tighter monetary policy in New Zealand and higher long-term interest rates internationally, but interestingly while home loan rates have increased in 2026 the increases have not been as much as you might think.
He added that cold, wet and windy conditions across much of the country on the last weekend of September may have further discouraged people from shopping.
The strain was most visible in non-food retail, which Paymark classifies as core spending excluding grocery and liquor stores, along with hotels, bars, cafés and restaurants. Spending in that category sat 0.9 percent above year-earlier levels in the first week of July, but had fallen to 7.1 percent below those levels by the final week of September.
It’s not really any surprise to people living in New Zealand and Kiwi Edition has seen plenty of similar reports.
- Fuel Prices – yup, they are hurting!
- Interest Rates – have slowly increased this year, but are still well down on what they had been.
- Weather – did someone say summer is coming?
It’s also been reported that while New Zealand is heading into the silly season, the usual pre-Christmas retail surge might be less pronounced than in previous years.
Where are Kiwi’s Spending?
Some areas of the country are doing better than others, and that means they are spending more too.
Marlborough posted the weakest results in September, with core retail spending down 9.7 percent on the same month last year. The West Coast followed with a 3.3 percent decline, Wellington was down 2.4 percent, and Bay of Plenty fell 2.2 percent.
At the other end of the scale, Gisborne recorded the strongest annual growth at 3.1 percent, followed by Hawke’s Bay at 2.8 percent. Whanganui, Palmerston North, South Canterbury and Southland also saw modest increases in spending over the same period.
As you can see, the consumer spending has actually increased in some areas.
What are you planning to spend this year?
Many families are more focused on budgeting and paying down debt than actually going out spending. That’s a good thing to be doing, but the lack of consumer spending does not help the country.
It is suggested that you do review your own consumer spending and make sure that you are making good decisions.
Review your debts and pay them off quicker.
Try and put some money away into savings and investment, even if it’s just using the Feijoa round up app to save more in your KiwiSaver.
Plus it’s okay to spend some money too!
