Accommodation was one of the biggest drivers of the quarterly increase, with sales values up 11% ($141m) and sales volumes increasing by 7.6%.
Sales values for recreational goods retailing rose by 5.1% ($38m).
Food and beverage services experienced a lift in sales values of 3.3% ($130m) with electrical and electronic goods retailing up 3.3% ($29m).
Eleven of the 15 industries had higher seasonally adjusted sales values in the December quarter compared with the September quarter.
Electrical and electronic goods retailing also saw a 5.1% lift in sales volumes, followed by department stores, up 4.2%.
Ten of the 15 industries had higher seasonally adjusted sales volumes.
Westpac senior economist Satish Ranchhod said the figures pointed to a firming in households’ discretionary spending appetites.
“New Zealanders dusted off their credit cards and hit the malls over the holiday.
“That’s consistent with the reduced pressure on households’ finances as inflation and interest rates have fallen, as well as the rise in consumer confidence in recent months.”
Ranchhod said the “solid” 0.9% lift in retail spending over the December quarter was slightly above the bank’s forecast of a 0.7% rise.
Going forward Ranchhod expected spending levels would continue trending higher in 2025.
“Interest rates have continued to drop. Importantly, the full impact of those declines is yet to be felt, as many mortgages are still on the relatively high interest rates from recent years.
“However, over the next six months, around half of all mortgages will come up for re-fixing, and many borrowers will have the opportunity to re-fix at lower rates. That will give spending a boost, especially through the second half of the year.”
Ranchhod said while the trend in spending over 2025 was likely to be to the upside, rising unemployment and a likely pick-up in inflation could limit that rise.
Steve Armitage, Hospitality NZ chief executive, said it was positive to see gains in activity across both accommodation and food and beverage services.
“While domestic visitation was strong in some of the expected hotspots, international visitation was a key driver over the last quarter of 2024, underscoring the importance of international tourism to the New Zealand economy. We would expect to see this carry over into the first quarter of 2025 in line with the traditional peak tourism season.”
Otago was one of the leading regions, with seasonally adjusted sales values rising by 7.8% ($125m) in the December quarter compared with the previous quarter, Stats NZ said.
Auckland rose 1.3% ($149m), while Canterbury was up 1.8% ($72m) and Waikato rose 2.5% ($67m).
All 16 regions had higher seasonally adjusted sales values over the quarter.
On an annual basis, the total value of actual retail sales for the December 2024 quarter was $33b, up 0.2% ($60m), compared with the December 2023 quarter.
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics including retail, small business, the workplace and macroeconomics.
