Total retail sales rose 1% in April, following a 1.2% fall in March, Statistics New Zealand data out yesterday showed.
Core sales, which strip out motor vehicle-related industries, fell 0.4% and are only up 2.1% compared with the previous corresponding period.
The sharp fall in retail sales in March, and the subsequent rebound in April, was because of the early timing of Easter this year, which led to fewer trading days in March and more in April.
However, the failure of core retail sales to rebound, and the continued fall in April, has economists worried.
ASB Bank chief economist Nick Tuffley said sales patterns were as expected with one notable exception: supermarket and grocery store sales fell 3.6% despite a 1.2% increase in food prices over the month.
"This fall is a little hard to explain beyond putting it down to volatility. We hardly think people gave up eating and price increases should have boosted the dollar spend.
"In theory, supermarket sales should be one of the most stable groups. Retail figures often show a degree of volatility - just not normally this much."
Even though there had been some rebound in retail spending growth, it was not a sign consumers had come to life, he said.
Easter and price increases played a role.
March sales were not explicitly adjusted for the shift in Easter.
That might only have had a modest effect on several retail categories now Easter sales were commonplace and made up for reduced business days.
It appeared as though workshop automotive components were affected along with car sales.
Both categories rebounded sharply in April to drive total retail sales up, Mr Tuffley said.
ANZ-National Bank chief economist Cameron Bagrie said the retail sector faced many challenges in the coming 12 months or more.
"We don't have to remind people of how household discretionary incomes are being squeezed by food and petrol price increases and how a weak housing market is yet to find a floor.
"With the labour market also now turning, less job security will also weigh on consumer spending decisions."
The data indicated that the June quarter had got off to a poor start, he said.
With the first quarter gross domestic product now generally cemented in as being negative, the combination of core retailing (negative), housing market statistics (very weak) and business and consumer confidence (falling) left the ANZ-National Bank leaning towards the same occurring in the second quarter.
"Given this environment, the Reserve Bank easing as soon as July is a real possibility. However, the global inflation backdrop of commodity prices, while beyond the Reserve Bank's control, remains a sticking point to an early move," Mr Bagrie said.
