Economists are picking retail spending to gradually grow over the coming year, but offshore turmoil should keep the official cash rate on hold.
Figures from Statistics New Zealand show sales volumes rose a seasonally-adjusted 2.2% compared to the previous quarter.
Seasonally adjusted retail sales rose 2%, to $17 billion.
ASB chief economist Nick Tuffley says while result shows improvement in spending, consumers are still cautious about opening their wallets.
He says he believes spending will continue to grow gradually and generally sales in the first half of the year have been growing at around 1% per quarter and slightly more than doubling during the World Cup period.
Mr Tuffley says it's now probably likely to settle back to similar rates to the first half of last year.
He says New Zealanders are still spending cautiously after the global financial crisis and spending within their means.
Mr Tuffley says once there is employment growth and slightly stronger wage growth it will help to encourage a lift in retail spending compared to a couple of years ago.
Meanwhile, ASB is predicting the Reserve Bank will keep the official cash rate on hold until December as the global economy continues to be in focus.