New Zealand retailers who have weathered the worst of the recession say sales are beginning to pick up and Christmas will be the turning point.
Although stores are expecting bigger sales than last year, a retail analyst says people will not be spending up large.
John Albertson, of the Retailers Association, says stores are bracing for the usual Christmas rush and are expecting better returns than last year.
Retail sales values rose in the September quarter, and although that was due to price rises rather than increased volumes, retailers say things are starting to improve.
Tim Morris, of market research company Coreolis, says he believes people will be more conservative in what they buy.
Many retailers are also being conservative this year and have stocked less goods for Christmas, he says.
Postie Plus says it is expecting a better Christmas trading season.
Chief executive Ron Boskell says new labels targeting younger customers, coupled with improvements to its supply chain, has boosted sales in the spring quarter by 15%.
Mr Boskell says after 18 months of restructuring, he is confident the group has turned a corner.