Retail sales are climbing, but beneath the headline figures, consumers remain cautious.
At first glance, retail’s headline numbers look strong. Spending is up and footfall has risen, too.
But those figures don’t tell the full story..
Although retail sales were up 6.1 per cent in the first quarter of 20261, it’s likely that most of that growth is due to rising retail prices, rather than shoppers filling their baskets with more products, says Chris Chris Wilkinson of First Retail Group.
“The retail sector has suffered from this issue's inflationary impact.”
“The numbers are better than they were a year ago but honestly it doesn’t feel that way in the wild.”
Juanita Neville, Te-Rito of RX Group
Juanita Neville Te-Rito of RX Group agrees that the “data and the daily reality of trading are two different conversations”.
“The numbers are better than they were a year ago but honestly it doesn’t feel that way in the wild,” she says. “When you talk to retailers on the ground, the margin pressure, the cost of doing business, and the fragility of consumer confidence are still front of mind.”
"The next consideration will be the potential for interest rate rises."
Chris Wilkinson, First Retail Group
In fact, consumer confidence dived to a three-year low in the second quarter, falling from 94.7 per cent to around 80 per cent2 after the start of the Middle East crisis.
The good news is that as fuel prices drop confidence will return, says Wilkinson.
“The next consideration will be the potential for interest rate raises, which will affect consumer confidence and appetite to spend – especially in discretionary categories,” says Wilkinson, who predicts a slowdown in October around the general election.
Numbers to know
59%
The share of shoppers who would abandon a purchase if the delivery timeframe wasn’t clear
Consumers want clarity over delivery times, according to the latest New Zealand Post e-commerce survey3. In fact, being able to track delivery was the third most important factor to consumers, behind sales/discounts and business location - and ahead of the returns policy.
46%
The percentage of shoppers who have used AI to compare products
Artificial intelligence is becoming an increasingly popular shopping tool, with nearly half of New Zealand shoppers using it to compare products and 24 per cent using it to compare prices4.
66%
The amount of e-commerce purchases made on smartphones
Move over desktops. Smartphones have become the new storefront, with two-thirds of all New Zealand ecommerce sales made on a smartphone in 20255.
trends
Temu growth slowing
After explosive growth in 2024, Temu’s dominance is plateauing, according to the latest New Zealand Post ecommerce survey6. Its share of cross-border purchases dropped from 14 to 11 per cent in 2025. Kiwis are mostly using Temu to buy clothing and footwear, according to the report, crediting low prices, value and a wide selection.
AI ads
A select group of Kiwi retailers are already trialling ads with ChatGPT and Google’s AI products, but the ads are likely to become available to more brands in the next six to 12 months. In the US, AI ads are going further with retailers like Walmart trialling the ability for consumers to complete a purchase with AI.
Reshaping retail returns
Uber just announced a new service to smooth the retail return process. Customers can order a return through the Uber app, and a courier will pick up their item, and process the refund that day. So far, the service is only available with a select group of US retailers (Best Buy, Dick’s Sporting Goods).
1 Statistics NZ, 2 Trading Economics, 3 NZ Post ecommerce sentiments report, 4 IAB and NZ post, 5 DHL Research
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