Retailers across New Zealand are tugging at their collars today as the consumer price index (CPI lifts to 3.1 per cent in the December quarter.
This is just outside of the Reserve Bank of New Zealand’s target range for inflation of 1 to 3 per cent.
New Zealand inflation has been steadily rising since early 2025, when it had softened dramatically to 2.2 per cent from a COVID peak of 7.3 per cent in the June 2022 quarter.
Retail NZ CEO Carolyn Young said the latest figures will come as a further blow to retailers, and is expected to make it more difficult for New Zealanders to manage household spending.
"We know that consumers have seen significant increases in core expenses such as rates, electricity, telecommunications, insurance and grocery prices, which keeps eating away at the confidence of consumers and their ability to get ahead,” Young said.
"That has a direct impact on discretionary spending as witnessed in the 0.5 per cent decline in spending for December 2025 announced yesterday."
Within the inflation data, prices in the fashion sector have rebounded to growth in the December quarter following annual deflation recorded in previous quarters.
CPI in the clothing and footwear group rose 1.7 per cent between December 2024 and December 2025 quarters. Separately, clothing rose 1.9 per cent while footwear rose 1.1 per cent.
In the September quarter, year-on-year, clothing and footwear CPI was flat, and was down 0.8 per cent in the June quarter.