8 July 2026

Retailers are feeling cautious after the Reserve Bank’s decision this afternoon to increase the Official Cash Rate (OCR) 0.25% to 2.5%. 

“It has been a challenging time for retailers in recent months, with the tough economic environment and lower consumer spending taking its toll on the sector,” Retail NZ Chief Executive, Carolyn Young, says. 

“Today’s decision by the Reserve Bank will make many of our members nervous. Hikes to the OCR can impact confidence and reduce consumer spending as interest rates rise, directly affecting homeowners through higher mortgage rates and other debt,” Ms Young says.  

“During 2024–2025 we saw 9 rate cuts by the Reserve Bank in an effort to stimulate growth and help the economy recover. Changes to the OCR is the only mechanism the Reserve Bank has to manage inflation and stimulate the economy, but rate cuts over that period struggled to make any meaningful impact on spending, and didn’t positively effect business and consumer confidence.” 

The OCR has been held at 2.25% since November 2025 as the country has dealt with some challenging economic conditions, including high unemployment rates and sharp rises in fuel prices. 

“Retailers have been feeling the effects of rising overheads in terms of fuel and freight costs, as well as higher power prices during these cold winter months. They know as well as anyone that next week’s inflation number is likely to show a noticeable increase, and that it is in their interests to get inflation back down to the Reserve Bank’s target range,” Ms Young says. 

“However, they’ll now be bracing for another tough few months ahead as those business costs remain high, but spending in-store is likely to reduce.”  

Along with next week’s Consumer Price Index, retailers will also be keeping an eye out for Stats NZ’s June Electronic Card Transactions data due out on Wednesday. 

For further information or to set up an interview please contact Carolyn Young on 021 449 452

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