New Zealand’s retail sales excluding motor vehicles and parts rose 0.7% quarter-on-quarter in the second quarter of 2025, down from 1% growth in the previous quarter, official data from Statistics New Zealand showed. The measure tracks sales volumes across most retail categories and is used to gauge underlying consumer demand without volatile vehicle sales. Growth in food, clothing and household goods helped support the quarter, but discretionary spending softened as households faced persistent cost-of-living pressures, elevated mortgage rates and an uncertain economic outlook. The weaker reading could weigh on second-quarter GDP (gross domestic product) and suggests household consumption is providing less support to growth than in earlier quarters. With inflation moderating but still above the Reserve Bank of New Zealand’s target range, the data may reinforce policymakers’ cautious approach to adjusting interest rates. Retailers face a more price-sensitive customer base, while consumers continue to prioritize essential spending and budgeting.