Kiwibank’s latest Household Spending Tracker reveals total household spending lifted 5.6% over the September quarter compared to last year. However, the volume of transactions fell 5.2%, signalling Kiwi are paying more for less as essentials eat into budgets. Supermarket and utilities spending remain elevated, while discretionary categories continue to struggle. Early signs of recovery are emerging in housing-related spending, hinting at confidence returning to the market.
After two years of tightened belts and frugal shopping lists, Kiwibank’s Senior Economist, Mary Jo Vergara, sees a quiet resilience emerging in Kiwi wallets: “Spending is picking up, but the story beneath the surface is one of re-prioritisation. Households are clearly cutting back on non-essentials, while ensuring the basics — food, power, and petrol — are covered first.”
Spending is picking up, but the story beneath the surface is one of re-prioritisation."Mary Jo Vergara, Senior Economist
Essentials rule the checkout
Supermarket spending rose sharply over the quarter, with both the value and volume of transactions up from a year ago. But the growth in dollars spent is double the pace of transaction growth, reflecting higher food prices still flowing through checkout counters. Grocery trips were up 5%, but carts are 11.2% more expensive.
“We’re seeing the ‘paying more for less’ dynamic for Kiwi. The value of each supermarket transaction is up 5.1%, which shows food inflation, while easing, is still biting.”
“Unfortunately, it’s a similar story for household bills. Spending on utilities jumped an eye-watering 19.3%, underscoring the squeeze from rising energy and council costs,” says Vergara.
Cafés stay steady, but retail takes a hit
Despite higher costs, the data shows some Kiwi are still carving out moments for small indulgences. Spending at cafés climbed 5.5% in value terms, while the number of visits rose just 1.4%.
“That tells us people are still treating themselves — just more selectively,” noted Vergara.
“Retailers, however, are feeling the chill. Spending on clothing and footwear fell 4.1%, and transactions declined even further by 6.1%, despite widespread discounting.”
Home is where the hope is
Housing-related spending — including furnishings, electronics, and renovations — is showing renewed life and signs of optimism. Home contents and furnishings spend rose 3%, electronics lifted 6.9%, and renovations were up 3.8%.
“These are the early green shoots we’ve been waiting for. Falling interest rates are freeing up disposable incomes and may be signalling that the housing market is stirring back to life.”
“While households are still grappling with higher costs and job insecurity, there’s reason for cautious optimism heading into the summer months. The pressure on household budgets hasn’t disappeared, but the tide is starting to turn. As interest rates continue to fall and confidence slowly rebuilds, we expect to see a gradual lift in spending — especially with Black Friday, Christmas, and Boxing Day just around the corner.”
“Recent business surveys have shown that retailers are optimistic, with hopes pinned on the upcoming festive season. Lower interest rates should help free up disposable incomes for homeowners and support a recovery in spending,” says Vergara.
While challenges remain, there’s genuine optimism that improving financial conditions and a buoyant festive season could help turn the tide.
While households are still grappling with higher costs and job insecurity, there’s reason for cautious optimism heading into the summer months."Mary Jo Vergara, Senior Economist
Media contact: Eleanor Ashdown, External Communications Manager 027 248 1059