Shoppers seemed to hold back on their credit card spending in July, as electronic card spending remained flat on the previous month.
On an annual basis, sales were up 4.3% from July last year.
ASB economist Christina Leung said excluding the volatile auto component of electronic card spending, core retail spending was up a ''more respectable'' 0.5% in July.
Auto included fuel and automobile-related purchases.
''Focusing on the core spending result, we retain our view of a continued improvement in underlying household spending.
"Consumer confidence remains high, supported by a pick-up in the labour market.
"This should encourage further modest growth in household spending.''
There were no fresh implications for monetary policy from yesterday's data, Ms Leung said.
ASB had forecast the Reserve Bank would hold its official cash rate at 3.5% until March next year.
The Statistics NZ data gave mixed results for the various components of the spending.
Consumables improved from a weak June, rising 0.3%, but still looked on the soft side in light of recent strong population growth.
Durables bounced back from a weak June, recording a 0.9% rise.
Continuing the mixed theme, apparel posted a strong 1.7% rise while hospitality fell 0.6%.
Ms Leung said the mixed data was in line with the contrasting fortunes of the housing and labour markets.
The housing market had cooled but the labour market continued to improve.
Households remained confident but their level of confidence had not translated into the same level of spending.
The June-quarter retail-trade survey on Thursday would provide a more detailed gauge of household spending, she said.