Consumers cracking down on their grocery spending as food prices soar, led to a drop in the volume of total retail sales in July.
Statistics New Zealand's latest figures show seasonally adjusted retail sales fell 0.8%, following a rise of 1% in June.
Despite the higher cost of food, supermarket sales decreased 2%, or by $24 million, while car sales dropped 5.3%.
Excluding vehicle industries, July retail sales fell 0.2%.
Goldman Sachs JB Were economist Shamubeel Eaqub says higher food and fuel prices are squeezing household budgets and supermarket retailers are feeling the pinch.
He says while there was a rebound in consumer confidence in August, food and fuel prices are unlikely to let up soon.
