A fall in spending on groceries and alcohol has led to a dip in retail, though levels are still above what they were a year ago.
Spending on consumables such as groceries and alcohol led the decline. Photo: 123rf
Official figures show spending using debit, credit and charge cards, edged down a seasonally-adjusted 0.4 percent last month, following a revised 0.9 percent gain in April.
Spending on consumables such as groceries and alcohol led the decline, falling 0.7 percent .
"The fall in retail card spending in May was driven by an easing of consumables spending, after a record increase in April," business indicators manager Craig Liken said.
"Fuel spending was also down, with lower prices throughout the month."
Excluding cars and fuel, core sales declined 0.4 percent.
On an annual basis, retail spending rose 5.2 percent.
Economists expect spending to remain strong in the short term, supported by a rising population and growing numbers of tourists.
"We wouldn't be surprised to see some better figures emerge over the coming months on the back of the British and Irish Lions rugby tour," ANZ Bank senior economist Phil Borkin said.
But there were signs the pace of spending was fading.
"After a strong lift in January, spending levels have been flat in a number of key categories, including durables and apparel," Westpac Bank senior economist Satish Ranchhod said.
"Some of this likely to be related to the slowdown in the housing market since late 2016, which will continue to weigh on spending through the latter part of the year."
Analysts say high indebtedness and the possibility of higher interest rates in the future may also curb household spending.