Retailers say Fonterra's financial problems partly account for retail spending slowing almost to a standstill.
Official figures show the value of seasonally adjusted retail sales rose by just point-one of a percent in the three months to the end of June.
That's down from gains of more than two percent in each of the previous two quarters.
Retail New Zealand spokesman Mark Johnston said there were several reasons for that, including the economic uncertainty heightened by Fonterra's difficulties.
"Fonterra certainly dominate the rural and provincial economies here in New Zealand, and I think yes, it has an impact on how much money consumers have in their pockets and what they're going to spend when they're out and about shopping."
Mr Johnston said they were expecting the next quarter also to be flat, but for spending to build up to Christmas.
Statistics New Zealand said higher online sales offset drops in spending on fuel, accommodation, and bars and restaurants.