Retail sales rose a seasonally and inflation adjusted 1.3 per cent in the June quarter, better than expected by economists, with the largest increase recorded in vehicle sales.
Statistics New Zealand said the quarterly rise in sales volumes was the fifth in a row, and the largest since the March 2007 quarter.
All four vehicle-related industry categories had higher sales volumes, with the largest increase the 4 per cent lift in vehicle volumes.
The 20 core retail industry groups, which exclude the vehicle industries, accounted for just over half the rise in sales volumes with an increase of 0.9 per cent.
The median prediction in a Reuters poll of economists was for a rise of 0.2 per cent in the seasonally adjusted retail volumes.
Seasonally adjusted retail sales in the month of June rose 0.9 per cent from May, with the biggest increase in recreational goods, which rose 9.5 per cent or $18m.
Statistics NZ said vehicle sales had been the largest contributor to the rise in sales volumes in the December and March quarters, as well as the latest quarter.
Among the core retail groups, the largest volume increases were a 3.4 per cent rise in appliance retailing, 5.4 per cent in accommodation, 3.4 per cent in clothing and softgoods, and 0.8 per cent in supermarkets and grocery stores.
Cafes and restaurants recorded the largest fall in seasonally adjusted sales volumes, down 2.6 per cent, while recreational goods sales volumes fell 2 per cent.
The value of actual retail sales in the June quarter was $16.1 billion, up 2.7 per cent from a year earlier.
Total retail sales for the June quarter were up a seasonally adjusted 0.5 per cent from the March quarter, and have risen every quarter since the March 2009 quarter.
ASB Bank economist Christian Leung said the 0.9 per cent retail lift for the June month suggested "some willingness on the part of households to spend again."
Retailers discounting looked to have played a part in encouraging sales, particularly for appliances, said Leung.
"Overall, the recovery in retail spending shows signs of picking up," she said. "While a range of data had been pointing to a sustainable recovery falling into place, the household sector had remained an area of weakness."
Leung said that "with signs that households are becoming more willing to spend the recovery in the NZ economy looks to be becoming more broad-based."
She said there was nothing in today's result to suggest that a pause in the OCR was warranted from the Reserve Bank as early as its next meeting in September.
Core retail sales were up a seasonally adjusted 0.4 per cent in the latest quarter, following a 0.6 per cent fall in the March quarter.
Vehicle sales were up 3.6 per cent, while supermarket and grocery store sales lifted 0.9 per cent, accommodation was up 4.8 per cent and clothing and softgoods sales lifted 3.2 per cent, Statistics NZ said.
The largest fall in seasonally adjusted sales for the quarter was a 2.4 per cent decline in fuel sales, while cafes and restaurants dropped 2.1 per cent and recreational goods fell 2.3 per cent.
For the month of June, fuel sales were down a seasonally adjusted 2.8 per cent and appliance sales were down 3.7 per cent.
ASB economist Jane Turner said the figures showed a gradual recovery in consumer demand, and the rise was relatively broad-based.
"Overall, it shows a modest recovery in the household sector."
UBS senior economist Robin Clements said the rise in volumes was surprisingly large, as retail prices fell as a result of heavy discounting.
The retail figures boosted the New Zealand dollar, which rose from around US70.85c to US71.35c by 11am, 15 minutes after the data was published.
- NZPA
NZ retail sales stronger than expected
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