More people in work and a high dollar have helped boost consumer spending - and analysts say that's set to continue.
Higher employment, the higher dollar and lower oil prices have helped household budgets stretch further.
Official figures show retail sales rose by 1.6 percent in the last three months of 2014, its strongest showing quarterly showing in two-and-a-half years. On an annual basis, retail sales have risen 4.7 percent.
People spent more on cars, eating out and clothing, and less in supermarkets and on fuel.
But spending is uneven. Auckland and Canterbury experienced strong growth, while gains remained modest in other parts of the country, and consumers in Waikato and Wellington tightened their belts.
Economists said the growing economy would underpin robust consumer spending, though falling dairy incomes was expected to keep growth in check.