Rate Cut Brings Hope For Retailers

Today’s cut in the Official Cash Rate – and the potential for another cut at the next review – is being welcomed by the retail sector, with hopes that it will boost consumer confidence.

A rise in confidence will help retailers, who have been suffering a continued downturn in sales, Retail NZ says.

“A turnaround in the economy can't come soon enough for the retail sector, so we are delighted at the Reserve Bank’s decision today to cut the OCR to 3%,” Retail NZ Chief Executive Carolyn Young says.

The Reserve Bank is also signalling that there may be scope to lower the OCR further, if medium-term inflation pressures continue to ease as expected.

“Consumer confidence remains fragile, and discretionary spending is being squeezed by persistent inflation in essentials like food, electricity and insurance. We have yet to see the boost expected from lower interest rates as more consumers re-fix their mortgages,” Retail NZ Chief Executive Carolyn Young says.

“Retailers are doing it tough, with many reporting declining sales and having to make difficult decisions around staffing.”

Retail NZ’s latest quarterly Retail Radar report, covering April-June 2025, showed that 62% of retailers failed to meet their sales targets for the quarter.

“We know that consumers are continuing to be careful with their spending. Low consumer confidence is still limiting sales and retailers are keenly awaiting improvements as we come out of a long tough winter and look towards the busy Christmas shopping season.”

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