Retail sales increased for the third quarter in a row, but the recovery for the three months to December slowed to 1 percent, Statistics New Zealand said today.
"Retail sales volumes have now risen for three consecutive quarters, but have still only regained a quarter of the ground lost since March 2007's high point," business statistics manager Kathy Connolly said.
The volume of core retailing, which excludes vehicle-related industries, also rose - up 1.3 percent. Appliance retailing was the main contributor to this increase, as it has been for the past three quarters.
The value of total retail sales rose 1 percent, or $171 million, in the quarter, while core retail rose 0.6 percent, or $77 million.
The increase in total sales was led by petrol and diesel sales, up 5.7 percent or $88m, and cafes and restaurants, up 6.3 percent or $61m.
Fuel retail values rose despite a 2 percent drop in volumes, implying an increase in prices.
ASB economist Christina Leung said that while December month retail values were weaker than expectations, over the December quarter retail sale volumes actually point to a recovery in consumer spending.
An increase in appliance sales volumes, up 3.2 percent for the quarter, largely drove the increase in retail trade volumes.
Spending volumes in cafes and restaurants were also higher over the quarter, likely reflecting spending by Australian tourists late last year. The increase is the largest over the history of the series.
"While at first glance today's retail trade numbers look weak, over the December quarter the increase in retail sales volumes suggest consumer spending is picking up again.
"Encouragingly, spending on big-ticket items show signs of improvement, with vehicle sales continuing to recover from very weak levels earlier last year."
Nonetheless, the recovery in consumer spending looked to be a gradual one, and with household credit remaining subdued in recent months people were still cautious about spending, she said.
