A $100 million drop in vehicle sales in May has contributed to the biggest fall in retail sales in more than four years - down a total of 1.2% for May.
However, when vehicle-related spending is excluded, sales rose 0.7%, driven by increases in fuel and supermarket sales.
UBS Investment Bank economist Robin Clements says the drop is no great surprise given the pressures facing households.
He says the increase in fuel and supermarket spending is likely to be the result of well-documented price increases.
Meanwhile, the latest Bank of New Zealand-Business New Zealand performance of services index shows a sharp drop in activity in the sector.
The index for June stands at 45.6%, which is down 3.5 points from May and is more than 12 points lower than in June last year.
A reading below 50 indicates the sector is generally declining.
