"About the middle of the year, it started to get better."
Mr Carthew said more shoppers were expected to descend on retail outlets for the Christmas season.
"We're feeling fairly positive.
"[But], no one's expecting anything," Mr Carthew said.
Toyworld owner Marie-Therese Evans said she was relying on Christmas to boost sales.
"With our relocation [to Queen St] it's hard to judge, but we've been off to a slow start and talking to a few people they say the same. There's definitely more foot traffic here though, which helps."
Nationally, seasonally adjusted retail sales dipped 0.8 per cent since the June quarter.
This was led by New Zealand's three largest retail industries: supermarket and grocery sales dipped 1.6 per cent, motor-vehicles and parts sales dropped 1.8 per cent and fuel retailing was down 1.9 per cent.
Business NZ chief executive Phil O'Reilly said the decline was relatively minor.
"It's not bad especially as the New Zealand economy faces really significant headwinds."
The weak performance of the manufacturing sector, combined with the preference for many "mums and dads" to pay off debt, could have caused a much larger downturn, he said.
"The fact that you've seen really quite a moderate downturn in retail is actually quite an impressive performance."
A strong September month for the service industry may have offset the drop in sales, Mr O'Reilly suggested.
Christmas shoppers were also expected to boost sales in the coming months, he said.
Stats NZ industry and labour statistics manager Blair Cardno said shoppers spent less in more than half of the retail industries during the September quarter.
"The only industry we saw them spending significantly more in was hardware, building and garden supplies, which was lifted by higher sales in the Canterbury region."
Sales volumes in this industry rose 4.2 per cent.
While retail sales were down from the growth period of 2011, total sales were up during the last quarter year-on-year.
"Retail sales volumes remains 2.6 per cent higher than a year ago, when the Rugby World Cup was on," ASB economist Daniel Smith said. "We expect moderate growth in spending to continue."
Mr Smith said the decline in supermarket sales would ease in the coming months.
"Other sectors were patchy, but we see no fundamental reason for the weakness in supermarket sales - the prime driver of the weak overall result - to continue in coming quarters."
- APNZ, additional reporting NZ Herald online/business desk
The figures
Total value of retail sales:
Masterton, Carterton and South Wairarapa districts
- September 2012 quarter: $104.9 million
- September 2011 quarter: $107.7 million
Down 2.6 per cent
Source: Statistics NZ
