Consumer spending grew at its slowest rate in more than two years because of a wet winter, lack of big events, and a slowing housing market.
A lack of big events in the spring is thought to have contributed to the fall in consumer spending in Q3. Photo: 123RF
Retail sales volumes, which strip out price movements, rose a seasonally adjusted 0.2 percent in the three months ended September, compared with the 1.8 percent rise in the previous quarter, which was driven by thousands of visitors for the World Masters Games and the Lions Rugby tour.
The strongest sales growth was in electronic goods, appliances, footwear and online goods, but restaurant and bar sales fell sharply after surging in the previous quarter.
Leaving aside fuel and vehicle related sales, retail sales volumes rose 0.5 percent.
"Considering election-related uncertainty and the becalmed housing market and post-Lions tour hangover... [this] was a solid result, consistent with the strengthening labour market backdrop and still elevated levels of consumer sentiment," said ASB Bank senior economist Mark Smith.
However, he said retail sales growth was expected to slow further as consumers stayed cautious because of the slower housing market.
Retail and other service sectors account for a major part of the economy, and softness in domestic activity is likely to have weighed on growth, which is currently forecast to be around 0.3 percent for the quarter.