Lauri Solecki, Dress Smart Onehunga centre manager, is remaining positive as the retail centre heads into Boxing Day next week. NZME Photograph by Alex Burton 20 December 2025
As Christmas approaches, retailers across the industry are hoping Kiwis spend big before the end of the year to make sure they can hit their sales targets and make it to 2025.
But one commentator believes New Zealand’s wider economic outlook is having a concerning effect on how consumers engage with retailers.
With New Zealand now officially confirmed to be in its deepest recession since 1991, the effects of rising unemployment and emigration off our shores are having a flow-on effect throughout the economy.
For retailers, spending over the holiday period is critical to meeting their annual sales targets, and according to the latest data from Worldline, their Christmas wishes may be coming true.
Consumer spending processed through all Core Retail merchants (excluding hospitality) over the first two weeks of December reached $1.65 billion, up by 1.2% compared to last year.
However, spending across the regions was mixed. Some areas reported growth compared to 2023, including Wairarapa (up 6%), Whanganui (up 5.2%) and Hawke’s Bay (up 4.8%).
In comparison, some of New Zealand’s biggest regions reported declining growth, including Wellington (down 0.7%), Bay of Plenty (down 0.7%) and Auckland/Northland (down 0.3%).
The average transaction value was also slightly down compared to December 2023 at $51.47, down by 1.1% compared to the $52.05 average for the same period last year.
For Chris Wilkinson, managing director of First Retail Group, it’s a reflection of the wider pressures being experienced within New Zealand’s economy and the world as it heads into 2025.
According to him, the retail sector has been questioning for months whether the Government understands the extent of the problem.
Wilkinson said retail is “a canary in a coal mine” in how it acts as a barometer for the economy, showing how consumers are responding to economic pressures.
Despite reductions in inflation and interest rate cuts, the effects haven’t been as impactful as hoped.
“At the same time we saw those tax cuts coming in, we also saw these cost-of-living increases continuing. That has been the biggest challenge,” Wilkinson said.
“You really can’t put a value on uncertainty out there.”
Wilkinson thinks that while the big retail players understand where the Government is heading, they are questioning the potentially wider impact their decisions could cause.
As fewer people spent their income in retail stores over 2024, Wilkinson said it caused a “significant erosion of profitability”, with any profit for retail this year likely inflation-driven.
Stats NZ’s September-quarter Retail Trade Survey reflected that, with retail spending declining for the ninth quarter in a row. He thinks the stakes are much higher.
“We’re not just talking about economic challenges, we’re going to see significant social challenges,” Wilkinson added.
“It’s really evident that in recent years, we’re seeing a lot of retailers have gone to sale early and those discounts are relatively deep, they’re doing what they can to get people through.
“But you can’t get away from the fact that people are very concerned for the future, for themselves and people around them. I think that is the thing that’s manifesting at the moment.”
Dress Smart Onehunga centre manager Laura Solecki understood the sentiment in the industry, but said the centre was doing its best to stay positive.
With a legacy of almost 30 years, she feels the centre benefits from a customer base that understands its value proposition, particularly during the holiday sales season.
“We have seen, especially on Black Friday, the data we’ve got indicates that there’s less consumerism, so there’s less volume, more focus on quality,” Solecki said.
She felt retailers were having to work harder than before to finalise sales.
One way she feels the centre has managed to stay positive despite the wider economic picture is the community fostered between stores.
Ally Pethybridge, store manager at Just Jeans, said while it was unlikely the store would meet its sales target for 2024, even with bumper Boxing Day sales, the support of the stores around her made the difference.
“It’s been rough. In my eyes, the customers are waiting for the sale,” Pethybridge said.
Although competitor Levi’s is nearby, this was a positive for Pethybridge.
“We’re two different stores and we’re run by two different businesses, but it’s one family here, so we’re all going to help each other out.”
As a mother of five, she said the wider economic outlook had added pressure to her personal finances, but was hopeful that changes to how she does business would make an impact.
Elsewhere in Dress Smart Onehunga, Bendon store manager Maira Patigaroo was confident she would meet her target this year but acknowledged that it’s been harder to guarantee, especially with Mānawa Bay as a competitor now.
Having joined Bendon just before Covid-19, she felt customer behaviour had changed.
She believed providing a welcoming, personable experience to shoppers was more important than ever, at a time when customers exhibit greater financial anxiety.
Solecki echoed that sentiment and said driving a customer experience based on people is what will bring sales in 2025.
The centre has recently undergone an extensive, $6 million upgrade including new floors, repainted ceilings, and refurbished bathrooms and amenities.
One way Solecki thought the centre can improve the customer experience is through community connection, and said a stage where local performers can play to patrons is in the works.
Heading into Boxing Day sales, Solecki reiterated that working with positivity is what would get them through.
“I bumped into a young guy in the centre, he was in his early 20s. He had done all his Christmas shopping here, all for just under $200 and he was stoked and he was so excited.
“I think if you’re dealing with that every day, those kind of really good news stories, that’s gonna keep you up. It’s gonna make you feel like you’re doing something.”
Throughout the retail sector, a key tenet expressed has been “Survive to ‘25″. For Wilkinson, that has very much changed to just “Survive”.
“We’ve seen wages go up, we’ve seen insurance and a lot of other rates are going up for many areas, which will feed into the retail ecosystem.”
He said the year ahead will be defined by how retailers respond to the economic outlook, particularly by looking for efficiencies in staffing and distribution, but they can’t rely on consolidation alone.
“You can’t stay the same because what’s happening is your competition is continuing to strengthen. We’ve got these wildcards that are happening right now like Temu and Shein, and while they don’t cross into all categories, what we are seeing is that consumers are using them.”
He thinks retail faces a continuing challenge in the shift of consumer sentiment, with people seeking experiences rather than goods.
Wilkinson said retailers need to contemplate a change of strategy, whether that means adjusting their opening hours to be open longer or enhancing their online offering, particularly small to medium retailers.
One retailer under significant pressure during 2024 was The Warehouse, which reported its toughest result in nearly 42 years back in September.
For Wilkinson, retailers like The Warehouse represent a bygone time, and in a way are reflective of the economy as a whole.
“Low everyday price models are becoming less and less relevant in today’s market, and for businesses that are holding on to those dearly, they need to rethink them as well.”
He agreed the business needed to regain its profile as a challenger in order to reinspire people.
Ultimately, Wilkinson thinks retailing needs to find its “sweet spot” as decision-makers pivot from an industry driven by retailers to one driven by the voice of consumers.
“What was right six months or 12 months or two years ago, it’s likely not going to be the same now.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
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