Fuel spending also fell in June, down 1.7% or $8.9m, although this continues to trend down from a 17% or $81m spike in fuel spending in March because of the war in Iran.
The only categories to report an increase in spending over June were motor vehicles (excluding fuel), up 0.8% or $1.6m, and consumables, up 0.4% or $11m.
Satish Ranchhod, senior economist for Westpac expects spending levels to rise only gradually towards the back part of the year.
Westpac senior economist Satish Ranchhod said cost of living pressures remain a key concern for households.
“Taking a step back and looking at the broader picture for the retail sector, things are still looking tough. Despite recent falls, fuel prices are still well above the levels we saw prior to the Middle East war, and consumer confidence remains down on the levels we saw at the start of the year,” Ranchhod said.
“Consistent with those trends, our own talks with consumers highlight an increased level of caution among households when it comes to spending.”
Ranchhod said 36% of the households spoken to by Westpac had told them they’d wound back their discretionary spending, and around 15% had delayed or cancelled travel plans.
Around 30% said they’d changed how they shop for essentials like groceries, purchasing fewer or cheaper items.
The non-retail (excluding services) category, which includes medical and other healthcare, travel and tour arrangement, postal and courier delivery, and other non-retail industries, decreased by $34m or 1.4% in June.
The services category, which includes repair and maintenance, and personal care, funeral, and other personal services was up in comparison, with spending rising $7m or 1.8%.
The total value of electronic card spending, including the two non-retail categories, decreased from May this year by $116m or 1.2%.
In actual terms, cardholders made 166 million transactions across all industries in June 2026, with an average value of $55 per transaction.
The total amount spent using electronic cards was $9.1 billion.
June quarter
With the impacts of the Iran war fully in effect, spending across the June quarter was split across the country.
Spending in the retail industries over the June quarter increased by $82m or 0.4%, while spending in the core retail industries decreased by $15m or 0.1%.
Breaking it down by category, spending was up in three of six categories during the quarter, led by fuel spending, which increased by 7.3% or $109m.
This was followed by durable spending, up 0.9% or $44m, and consumables, up 0.3% or $24m.
Hospitality reported the largest decrease in spending over the quarter, down 1.2% or $55m, followed by motor vehicles (excluding fuel), down 1.3% or $7.4m, and apparel, down 2% or $20m.
The non-retail (excluding services) category was down $0.7m, or flat on a percentage basis, and the services category was down by 2.3% or $28m.
The total value of electronic card spending, including the two non-retail categories (services and other non-retail), increased by 0.5% or $145m compared with the March 2026 quarter.
Ranchhod said that looking ahead, the pressure on fuel costs looks likely to persist.
“With renewed tensions in the Middle East, global oil prices are up around 10% since the start of this week. If that’s sustained, petrol prices in New Zealand could be headed back up above $3 a litre.
“Combined with other cost of living pressures, a soft labour market and continued economic uncertainty, we expect spending levels are likely to rise only gradually through the back part of the year.”
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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