New Zealand’s retail sales growth accelerated sharply in the third quarter of fiscal 2025, with a 1.90% increase quarter-on-quarter (QoQ) reported on November 26, 2025. This figure, sourced from the Sigmanomics database, notably outperformed consensus expectations of 0.60% and the previous quarter’s 0.70% gain. The latest reading is the strongest since the 1.40% rise in February 2025 and reverses a series of subdued or negative quarters seen in 2024.

Drivers this month

• Strong demand in durable goods and electronics boosted sales by 0.80 percentage points (pp).
• Food and beverage retail contributed 0.50 pp, reflecting stable household consumption.
• Automotive and fuel sales added 0.30 pp, supported by easing fuel prices.
• Clothing and footwear saw a modest 0.10 pp increase, indicating cautious discretionary spending.

Policy pulse

The 1.90% growth exceeds the Reserve Bank of New Zealand’s (RBNZ) inflation target zone, suggesting consumer spending remains resilient despite tighter monetary conditions earlier in 2025. The RBNZ’s official cash rate currently stands at 5.50%, unchanged since September, reflecting a wait-and-see approach amid mixed inflation signals.

Market lens

Immediate reaction: The NZD/USD pair appreciated 0.40% within the first hour post-release, while 2-year government bond yields rose 6 basis points, signaling market confidence in sustained domestic demand. Breakeven inflation swaps edged up 3 basis points, reflecting slightly higher inflation expectations.

Retail sales are a core macroeconomic indicator reflecting household consumption, which accounts for approximately 60% of New Zealand’s GDP. The 1.90% QoQ increase in November 2025 contrasts with the average quarterly growth of 0.20% over the past 12 months, underscoring a notable pickup in consumer activity.

Historical comparisons

• November 2025’s 1.90% gain is the highest since February 2025’s 1.40% and well above the -0.10% contraction recorded in November 2024.
• Compared to the 12-month average of 0.20%, the current reading signals a significant acceleration in retail momentum.
• Earlier in 2024, retail sales experienced three consecutive quarters of negative or flat growth, with -1.90% in February 2024 and -1.20% in August 2024.

Monetary policy & financial conditions

The RBNZ’s steady policy stance and recent pause in rate hikes have improved financial conditions. Lending rates have stabilized, supporting consumer credit growth. Inflation has moderated from a peak of 7.30% YoY in mid-2024 to 3.80% in October 2025, easing pressure on household budgets.

Fiscal policy & government budget

Government spending remains supportive, with targeted fiscal stimulus in infrastructure and social welfare programs. The 2025 budget maintained a modest deficit of 1.50% of GDP, balancing growth support with fiscal prudence.

Drivers this month

• Durable goods: 0.80 pp contribution
• Food & beverage: 0.50 pp
• Automotive & fuel: 0.30 pp
• Clothing & footwear: 0.10 pp

Policy pulse

The RBNZ’s current stance balances inflation containment with growth support. Retail sales above estimates may delay further rate hikes but keep the door open for tightening if inflation rebounds.

Market lens

Immediate reaction: NZD/USD rose 0.40%, 2-year yields climbed 6 bps, and inflation breakevens nudged up 3 bps, reflecting market optimism about domestic demand and inflation outlook.

Looking ahead, New Zealand’s retail sales trajectory will hinge on several factors, including inflation trends, monetary policy adjustments, and external risks. The strong November print suggests a bullish base case but also warrants caution given global uncertainties.

Scenario analysis

• Bullish (30% probability): Retail sales maintain 1.50–2.00% QoQ growth, supported by stable inflation (~3%), accommodative fiscal policy, and resilient consumer confidence. GDP growth accelerates above 3% annually.
• Base (50% probability): Growth moderates to 0.50–1.00% QoQ as inflationary pressures and global headwinds temper spending. Monetary policy remains on hold, with GDP growth around 2%.
• Bearish (20% probability): Retail sales contract or stagnate due to renewed inflation spikes, tighter credit conditions, or external shocks such as geopolitical tensions or commodity price volatility. GDP growth slows below 1%.

External shocks & geopolitical risks

New Zealand’s open economy remains vulnerable to trade disruptions, especially with China and Australia. Escalating geopolitical tensions in the Asia-Pacific region or global supply chain interruptions could dampen consumer sentiment and retail activity.

Structural & long-run trends

Longer term, digital commerce and sustainability trends are reshaping retail. E-commerce penetration in NZ has grown steadily, now accounting for approximately 15% of total retail sales, supporting diversification and resilience.

The November 2025 retail sales QoQ reading of 1.90% marks a robust rebound for New Zealand’s consumer sector. This data point, sourced from the Sigmanomics database, signals renewed household spending strength amid a cautiously balanced macroeconomic environment. While monetary policy remains vigilant, fiscal support and easing inflation underpin a positive near-term outlook. However, external risks and financial market volatility require close monitoring. Investors and policymakers should weigh the upside potential against downside risks in the evolving global landscape.

Key Markets Likely to React to Retail Sales QoQ

Retail sales data is a critical barometer for New Zealand’s economic health and influences multiple asset classes. The following five tradable symbols historically correlate with NZ retail sales movements, reflecting sensitivity to domestic consumption trends and monetary policy shifts.

• NZX50 – New Zealand’s benchmark stock index, closely tied to consumer sector performance and overall economic sentiment.
• NZDUSD – The New Zealand dollar vs. US dollar currency pair, sensitive to retail sales as a proxy for economic strength and interest rate expectations.
• AUDNZD – Reflects relative economic momentum between Australia and New Zealand, often influenced by retail and consumption data.
• BTCUSD – Bitcoin’s price can react to shifts in risk sentiment driven by macroeconomic data including retail sales.
• ASX200 – Australia’s stock index, often moving in tandem with NZ markets due to regional economic linkages.

FAQs

What is the significance of New Zealand’s Retail Sales QoQ data?

The Retail Sales QoQ data measures consumer spending trends, a key driver of GDP growth and inflation, influencing monetary policy decisions.

How does the Retail Sales QoQ impact the NZD currency?

Stronger retail sales typically boost NZD value by signaling economic strength and potential interest rate hikes, while weaker sales can pressure the currency downward.

What are the main risks to New Zealand’s retail sales outlook?

Risks include inflation volatility, tighter credit conditions, geopolitical tensions, and global supply chain disruptions that could dampen consumer spending.

Final takeaway: New Zealand’s retail sales rebound in November 2025 underscores resilient consumer demand, supporting a cautiously optimistic growth outlook amid evolving global risks.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.