Statistics New Zealand data showed retail spending on credit, debit and store cards rose more than expected in May, led by fuel, food and liquor and hospitality. Car spending rose 0.6% in May, following a 1.2% rise in April. Annual sales were 5.2% ahead of last year.
Ms Kinnaird said the key sectors for most New Zealand listed retailers of durables and apparel experienced a mixed May. Durables - items that do not have to be repurchased regularly, such as whiteware - reported strong growth of 7% on the previous corresponding period following an 8% increase in April.
Apparel lagged, reporting growth of 2%, following a strong 9% rise in April.
Hospitality led the gains in May with a rise of 9%. The sector had outperformed core retail for the last four consecutive months, she said.
''The New Zealand consumer economy continues to show gradual positive momentum, although most retailers are still cautious on the outlook and consumer confidence is broadly neutral.''
Forsyth Barr had accumulate recommendations on Pumpkin Patch, Michael Hill and Restaurant Brands shares in light of valuation attractions and their outlook, Ms Kinnaird said.
The recommendation on Hallenstein Glassons, Kathmandu and Briscoe Group was hold given the companies were viewed as fully priced.
''Our recommendation on The Warehouse, which has yet to demonstrate material positive returns from its major store reinvestment programme, is reduce,'' she said.
Westpac senior economist Michael Gordon said the May increase in electronic card spending was larger than anticipated.
Consumer spending had continued to grow steadily this year and, like many other indicators, there had been no real evidence of knock-on effects from the drought earlier in the year. Westpac had revised down its estimate of March quarter economic activity in light of recent data but the bank was likely to revise up its forecast for the June quarter which currently sat at 0.2%, he said.
Mr Gordon singled out fuel spending from the statistics which was up 3.8% for the month and 7.7% for the year. Fuel prices started to increase in late May, the increase driven almost entirely by volumes sold - a consistent and notable development over the last year and one that coincided with an improvement in general economic activity.
