New Zealand's spending slows as inflation and housing costs squeeze budgets
Consumer spending in New Zealand has shown mixed trends at the start of 2026. While some areas like dining out have seen growth, others such as clothing and takeaways are struggling. Rising costs and economic uncertainty continue to shape household budgets across the country.
January saw a noticeable drop in overall spending, falling 2.7% below the monthly average. Compared to the same month last year, it was down by 2.3%. Despite this, certain sectors are still seeing activity—hardware store visits rose by 6% in December, reflecting stronger demand for housing-related goods.
The housing market remains weak, with much of household wealth tied up in property. Meanwhile, inflation climbed to 3.1% in December 2025, largely driven by housing costs. Utilities spending has surged by 36% compared to last year, adding further strain to budgets.
Consumers are adjusting their habits in response. Fewer shopping trips are being made, but each visit now involves higher spending. Apparel sales have declined, hitting clothing retailers hard. Dining out is one bright spot, with restaurant visits increasing, though cafe spending—while up nearly 9% from last summer—remains cautious. Takeaway orders, however, continue to fall steadily.
Job insecurity and concerns about the labour market are also weighing on confidence. Even with lower interest rates than last year, essential costs keep rising, leaving many households stretched.
The latest figures highlight a cautious consumer landscape in New Zealand. Spending shifts reflect both rising living costs and changing priorities, with some sectors benefiting while others face challenges. The pressure on household budgets is likely to persist as inflation and economic concerns remain.
