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Consumers kept a tighter hold on their spending heading into the holidays, according to data from Kiwibank.
Spending using the bank's electronic cards rose 5 percent in the three months ended December on the previous quarter, but it was little changed from the year before.
Senior economist Mary Jo Vergara said the amounts being spent were a touch higher, but people were buying less because of inflation increasing prices, while higher interest rates were already squeezing households.
"The financial conditions are much tighter today and it's no surprise to see household demand is weaker and the appetite to spend is weaker as well."
She said the holiday spend was far more muted than previous years, with the number of transactions down 3 percent on a year ago.
Vergara said there were changing patterns as well; the amount spent on hospitality, entertainment and recreation was down by more than 4 percent.
"Hospitality had to suffer through Covid and is now at the mercy of inflation."
Similarly, spending on big ticket items was lower and subdued on DIY projects - suggesting smaller and more modest work being done, while spending on air travel grew less than 2022.
"We also suspect heavy price discounting - due to overstocked shelves - was at play, which, evidently, Kiwi accepted," Vergara said.
She said the overall softer tone to holiday spending and indications for the January month pointed to a tougher time for retailers this year, although the big migration gains might be a cushion.
"The return of migrants offers a lifeline. Strong population growth should support aggregate consumption."