New Zealand Retail Sales Jump 0.9% in Q4 2024, Outperforming Expectations

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Q4 2024 Retail Sales Growth

New Zealand’s retail sales rose 0.9% in Q4 2024, surpassing expectations of 0.6% and marking the strongest quarterly growth since early 2023. Key sectors like motor vehicles (3.7% increase) and hardware (2.9%) led the surge, while food and beverage services grew by 2.1%. However, electrical goods retailing fell 4.2%, and supermarkets declined 0.8%.

Economic Context and Influencing Factors

The Reserve Bank’s stable 5.50% interest rate supported consumer spending despite inflation and global uncertainties. Improved global supply chains, tourism recovery, and migration-driven population growth bolstered retail activity. Regional growth varied, with Auckland seeing 1.2% growth, while rural areas averaged 0.4%. Online and in-store shopping both showed resilience, with transaction values rising 1.8%.

Employment and Monetary Policy Outlook

Strong labor market conditions, including 4.3% unemployment and 4.5% wage growth, underpinned consumer spending. Retail employment expanded by 5,700 jobs, creating a positive feedback loop. While retail data suggests potential for rate stability, economists caution against immediate hikes due to balanced growth and inflation considerations.

International Comparisons and Future Trends

New Zealand’s 0.9% growth outperformed peers like Australia (0.3%) and the UK (0.1%), driven by domestic factors such as trade agreements and tourism. Inflation-adjusted real growth was 0.4%, indicating moderate expansion. Forward-looking indicators suggest cautious optimism for 2025, with continued migration, stable employment, and global economic stabilization supporting retail momentum.