New data has revealed Kiwis are spending more in the lead-up to the festive season as inflation continues to bite.
The latest results from Worldline showed in the first week of December people spent $785 million, which is up 1.4 percent on the first seven days of 2022 and up 13.9 percent from the same period in 2019.
But not all sectors are seeing the trend, with consumers spending at food and liquor stores instead of retail.
Economist Brad Olsen told AM on Monday morning people are spending more on the essentials.
"We're still spending a lot on effectively the essentials, food and liquor, that's up just over 6 percent compared to the first week of December last year, but all the other spending categories are actually down around 6 percent," he said.
"I think what that is highlighting is people are spending more on their supermarket shopping, they're spending more maybe on a few little treats, but more at that smaller end, not spending on some of the big stuff we've seen, particularly the likes of furniture sales, the likes of clothing and footwear, people aren't spending quite as much on those areas."
But there were some positive trends with bookshops up 1.7 percent, toys and gaming up 2.4 percent and chemists up 8.2 percent.
But Olsen noted these increases, except chemists, still below inflation, which is currently sitting at 5.6 percent.
"Although you've got a little bit more spending, 2.5-3 percent more spending, you've also got those prices haven't gone up 5 percent," he said.
"That means the number of items that you're taking out of the store, the number of Lego boxes you're buying, for example, is actually fewer than last year. You're just paying more for them.
"So a little bit of good news that it's not already so negative, but I think, again, if I'm a retailer, you talk to a lot of them it's a lot harder to get people to go from window shopping to actually get them to the till and put some money down on the counter. So still spending but with a lot more restraint."
With the festive season in full swing and Christmas only 14 days away, Olsen said the price of one common festive season staple is soaring.
"You look at the likes of chocolate, for example, normally a staple for the Christmas period, that's up around 11 percent on last year. So becoming a lot more expensive to buy that box of scorched almonds or similar," he said.
"Other areas like buying the likes of a magazine and the like have increased as well."
With Christmas being the period for giving, Olsen that Kiwis need to be careful when providing gifts for their pets.
"The one area I think people have got to be pretty cautious of is just how much they're spending on their pets this Christmas," he said.
"Pet costs up 12 percent per annum. That's a pretty high lift. Of course, it's important that people are looking after their pets. So although I don't think you'll see a huge amount of spending, maybe a small dog toy this year rather than nothing at all."
Watch the full interview for more.
