The headline number is a mirage
Overall card spending rose 0.5% in March 2026. That sounds like stability. It is not. A 33% surge in spending at petrol stations accounts for all of it and then some. Once you strip out fuel, Retail NZ estimates core retail spending dropped 1.2% year-on-year.
Retail NZ chief executive Carolyn Young is blunt: “The 0.5 percent headline growth is a mirage. Our analysis has found that behind that figure, fuel is doing the heavy lifting.” Consumers have not maintained spending and shifted categories. They have been forced to spend more on fuel and have cut everything else.
Kiwis are driving less and still paying more
Fuel spending hit $583 million in March 2026, up 10.2% year-on-year. But in March 2024, when diesel was $2.17 per litre compared to $2.61 now, fuel spending was actually higher at $591 million. The maths is simple: people are driving significantly less but paying more for the privilege.
Young’s read is that fuel spending should have exceeded $600 million if driving habits hadn’t changed. That missing travel is missing foot traffic, missing trips to shops, missing restaurant visits. Stats NZ data shows petrol up 18.6% and diesel up 42.6% in March alone, a cost shock that sits inside every supply chain given 93% of New Zealand freight moves by road.
Apparel and hospitality are taking the worst of it
Apparel spending fell 4.2%, or $14 million, in March. Hospitality dropped $37 million, or 2.4%. Hospitality NZ head of advocacy Sam MacKinnon described a double squeeze: “There’s also a squeeze at the other end of the spectrum as suppliers grapple with their costs and place surcharges on deliveries, further tightening margins.”
Restaurant Association general manager Nicola Waldren reported two-thirds of operators seeing fewer customers while costs rise, with more than three-quarters attributing the damage to the global conflict driving fuel prices.
This hit a sector that was already on its knees
The fuel crisis did not land on a healthy retail sector. Retail NZ’s Q4 2025 Retail Radar report showed only 48.3% of retailers met their sales targets in the final quarter of last year. Of those who missed, only 28% expected any turnaround in Q1 2026. Retailers had already adopted what the report called “reluctant realism” – running leaner stock, downgrading expectations.
Young captured the timing perfectly: “Just at a time when we thought we were coming out the other side.”
The investment freeze tells you what happens next
A Research New Zealand survey of 433 business owners conducted in late March found 61% are not planning any investment in the next 12 months. That is the number that should alarm policymakers more than any spending figure. Businesses that do not invest do not hire, do not expand, and do not place large orders with suppliers.
The same survey found 63% describe the current economic situation as bad or very bad, 52% are focused purely on maintaining their current size, and a record 42% said they had hardly ever or never felt hopeful in the past two weeks.
Young has warned that “many don’t have the financial reserves to weather another sustained setback”. The Research NZ data puts a number on that warning: 2% of businesses plan to close outright, 14% plan to downsize. Those are the businesses admitting it. The ones that close without planning to will add to the toll in the months ahead.
Retailers now face a grim convergence: falling demand, rising freight costs, an investment drought that suppresses future orders, and a consumer base that has already cut discretionary travel. The confidence damage is arriving before the worst of the physical supply disruption. That makes this quarter’s losses a floor, not a ceiling.
Sources
- RNZ: Spending data worse than it appears, Retail NZ says (2026-04-14)
- RNZ: Retailers taking a hit from high fuel prices (2026-04-17)
- NZ Herald: Fuel spike from Iran war hits New Zealand hospitality and retail as Kiwis cut spending (2026-04-17)
- Inside Retail: Card spending data masks massive increase in fuel spending (2026-04-14)
- Inside Retail: Most NZ businesses remain in ‘survival mode’ – report (2026-04-13)