Electronic card transaction data for January shows spending in the retail industries decreased 1.1%, or $78 million

Spending in the core retail industries decreased 0.9% (or $60m), the Stats NZ data shows.

This took spending back to levels last seen in September, said Westpac senior economist Satish Ranchhod.

“In contrast, we had expected spending would hold at the firmer levels seen in the latter part of last year.

“While this was a disappointing start to the year for retailers, some of January’s falls might be payback for the gains in spending that we saw in categories like furnishings through the final months of 2025.”

The January fall in spending was widespread.

Grocery food spending was down 0.9%, as was spending on fuel (down 3.7%, reflecting the fall in fuel prices over the month).

“Notably, spending in discretionary areas was also down, with purchases of furnishings and other household durables down 1.7% and hospitality spending down 2.1%,” Ranchhod said.

ASB economist Kim Mundy suggested the wetter-than-usual weather may have had an impact on spending levels.

“We had expected a decline given the severity of the weather that impacted multiple regions during the month,” she said.

“Consumables and durables were also weak and extended declines in December,” Mundy said.

“It’s likely that the weather impacted spending in these categories, too.”

Elsewhere, fuel spending fell 3.7% over the month, helped in part by a fall of about 2% in fuel prices in January.

Stepping back and taking a longer-term perspective, compared to the same time last year, spending in core categories (excluding fuel) was up 1.1%, Ranchhod said.

In actual terms, cardholders made 177 million transactions across all industries in January 2026, with an average value of $55 per transaction. The total amount spent using electronic cards was $9.8 billion.

Looking to the year ahead, the pieces were still in place for a pick-up in household spending, though it might be gradual in the near term, Ranchhod said.

“Average borrowing costs are still dropping as many borrowers continue to roll off earlier higher mortgage rates and on to lower ones,” he said.

“Export commodity earnings remain firm, boosting incomes in many parts of the country.”

Consumer confidence was also on the rise. Fuel prices had fallen and population growth looked like it had reached a low, he said.

“But while there are a range of factors that will help to support spending over the coming year, we’ve continued to see softness in the labour market, with unemployment rising to 5.4% over the past year.”

The related softness in disposable income growth was likely to remain a drag on spending for a while yet, Ranchhod said.

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.