Statistics New Zealand figures showed retail spending using electronic cards was $4.6 billion in July, up $244 million, or 5.6%, from July last year.
When adjusted for seasonal effects, retail spending rose 0.4% in July compared with June.
There was a 0.5% rise in June.
All six retail industries had higher sales in July. Apparel had the largest increase, while the other five industries rose modestly, two almost unchanged.
Ms Mundy expected retail card spending to slow further as confidence waned, particularly in the dairy regions.
''That said, spending is slowing from high to average rates of growth.''
Beyond the dairy sector weakness, the gradual improvement in the labour market and disposable income growth would support modest growth in domestic spending throughout the rest of the year.
Strong tourist inflows would generate additional retail spending in New Zealand, she said.
The slowdown in spending growth was most apparent on consumables, durables and fuel.
Durables spending was typically tied to new housing construction and house sales.
The slowdown might reflect softer growth in housing construction during the past few months.
Apparel spending surged by 3.6% following a period of declines, Ms Mundy said.
''This strong pick up may have been prompted by the especially cold weather in parts of New Zealand in early July.''
Spending on vehicles rose 2.4% compared to June and hospitality spending rose by 0.7%.
Hospitality spending had maintained some ''reasonable momentum'' as visitor arrivals remained steady and at historically high levels, she said.
