New Zealand retail workers received an average pay rise of about 1 percent over the past year, a sharp slowdown from the year before and well behind the 4.1 percent rise in consumer prices.
The figure comes from the 2026 Wages Guide published by industry body Retail NZ on 4 August. It puts the overall average retail wage at $30.94 an hour, up from $30.64 a year earlier, an increase of just under 1 percent. The 2025 guide recorded a lift of 3.4 percent. The survey covers 21 roles across supermarkets, clothing, hardware and homeware retailers, taking in everyone from sales assistants and delivery drivers through to store managers and back office staff in finance and logistics.
Retail NZ chief executive Carolyn Young said the softer number reflects the conditions retailers are working in. “Retailers are continuing to manage tight margins and sluggish consumer confidence,” she said.
The more revealing part of the explanation is what sits behind the average. Young told 1News that job cuts had been concentrated in better paid roles. “There has been a lot of restructuring and there has been a lot of staff that have been lost, both in the support offices and even on the shop floor,” she said.
That matters for how the number should be read. An average wage can fall behind for two quite different reasons. Either the people still working are getting smaller rises, or the better paid jobs have gone and the mix of remaining jobs is cheaper. Young is describing the second. A store assistant who stayed put may have received more than 1 percent, while the sector average was pulled down by head office roles that no longer exist.
New Zealand saw plenty of that through 2026. The Warehouse announced in February it would cut 270 head office jobs to save $70 million over five years, with some work outsourced and some replaced by software. EB Games shut all 38 of its New Zealand stores in January. Last week Ballentynes Fashion Central closed after more than 50 years, with 10 of its stores rebranding to Caroline Eve.
Set against the legal floor, the retail average is losing ground from both directions. The adult minimum wage rose 45 cents to $23.95 an hour on 1 April, an increase of 1.9 percent, roughly double the rise in the sector average. The voluntary living wage, calculated independently by Living Wage Movement Aotearoa New Zealand, currently sits at $28.95 and rises to $29.90 on 1 September.
That leaves the average retail wage $1.99 above the living wage today. From 1 September the gap narrows to $1.04. Two years ago the distance was considerably wider. Retail NZ is right that the sector average clears both benchmarks, but the margin is thinning fast, and a pay structure where the floor rises faster than the average is a compressed one.
The comparison with the wider workforce is starker again. Stats NZ figures released on 5 August put average ordinary time hourly earnings across all industries at $44.62, up 2.8 percent for the year, with average weekly earnings for full time workers at $1,730. Retail pay of $30.94 is a little under 70 percent of the national average hourly rate.
Those same figures showed the labour market weakening. “The unemployment rate was 5.6 percent in the June 2026 quarter, compared with 5.4 percent in the March 2026 quarter,” Stats NZ labour market spokesperson Abby Johnston said. That is the highest rate since March 2014. Underutilisation, which counts people who are unemployed, working fewer hours than they want, or on the edge of the labour force, reached 13.8 percent, or about 440,000 people. Newswire covered that release here.
Inflation is doing the rest of the damage. Annual inflation was 4.1 percent in the June quarter, up from 3.1 percent in March and above the Reserve Bank target band of 1 to 3 percent. Petrol was the single largest contributor at 27.5 percent for the year, with diesel up 71 percent. Fuel is not a discretionary purchase for most households, and it eats the same dollars retailers are competing for.
The New Zealand Council of Trade Unions made a similar point in its economic bulletin published on 7 August, which looked at how wages have tracked against prices over the five years from mid 2021 to mid 2026 and concluded the average worker is no better off, and in many cases worse off, than at the start of that period. The bulletin is written by the CTU economist and policy director Craig Renney.
None of this means retail employers are simply holding pay down. Retail NZ says more than half of retailers offer staff discounts and upskilling, 43 percent pay commission or sales incentives, and one in five contribute more to KiwiSaver than the legal minimum. Those are real parts of the package that never show up in an hourly rate.
Nor is the mood in the sector uniformly grim. Retail NZ’s Retail Radar survey for the second quarter, released on 28 July, found 69 percent of retailers confident of surviving the next 12 months, up from 61 percent in the previous quarter, and 61 percent expecting to meet or beat their sales targets in the September quarter, against just 34 percent in the quarter before. Concern about freight costs dropped from 79 percent to 63 percent, and worry about card payment fees fell sharply after the cap on domestic credit card interchange fees.
The trouble is that confidence has not yet turned into spending. Electronic card spending in the retail industries fell 1.4 percent in June, a drop of $98 million on the month, and annual growth in card transactions eased to 1.3 percent from 3.3 percent in May. Until that turns, there is not much in the till to fund bigger pay rounds.
Retail remains one of the largest employers in the country. Retail NZ counts 222,400 people working across 29,505 retail businesses, and Young said the sector “remains a critical pillar of New Zealand’s economy”. On current numbers it is also a sector where the average wage is being held up largely by the jobs that have survived, rather than by the pay rises handed to the people doing them.
Are you working in retail, or running a shop? Tell us what has happened to pay and staffing where you are in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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