New Zealand retailers have recorded their strongest annual growth in core retail spending since January 2024, according to the latest Stats NZ Electronic Card Transaction data for May 2026.

Core retail spending rose 2.8% in May compared with a year earlier, the biggest increase in more than two years.

“Most impressively, the durables sector, which includes furniture, hardware, electronics, and pharmacies, jumped 4.8% on 2025 figures,” says Retail NZ chief executive Carolyn Young.

She credits falling costs and a run of promotions for the lift. “We are seeing the evidence of the ‘IKEA Effect’ boosting furniture sales. With fuel prices finally coming down from the highs of March and April, people who had put off buying major items are out spending again, heavily supported by King’s Birthday weekend promotions.”

Hospitality also performed well, up 3.2% on May last year. Young says a busy events calendar drove much of that spending. “We’ve seen a number of high-profile sporting and music events over the past month. People are spending with local retailers then choosing to make a night of it by heading out to local restaurants and bars.”

Growth in consumables was more modest by recent standards, with shoppers still watching their grocery budgets. “Kiwis are still being strategic with day-to-day budgets,” Young says. “We know people are actively switching to cheaper brands to bring down their weekly grocery spending, with thought behind every dollar spent.”

Overall, she says it is highly encouraging to see retail return to growth despite recent international turbulence.