Wages in the retail sector have risen only marginally, and well below inflation levels, according to newly released data from Retail NZ.It comes amid difficult conditions for the retail sector, which faced shrinking margins and falling sales.Retail NZ's 2026 wages guide - covering 21 May to 12 June - showed that overall, the average retail wage rose to $30.94 per hour, up 1 percent on last year.It was much lower than the 3.4 percent increase in the 2025 wages guide, which Retail NZ said was due to economic headwinds facing the sector.It was also lower than the annual rate of inflation, which was 4.1 percent in the June quarter."We're seeing a lot of retrenchment within the [retail] sector as consumer confidence is low, we know business confidence is low [and] the economy is really tight," Young said.She said the low wage increases reflected what was affordable for the sector."While wage growth has slowed compared to previous years, the average retail wage remains well above the minimum wage ($23.95) and living wage ($28.95)," Young said.The living wage is due to increase to $29.90 from 1 September.Young said the report also showed more than half of retailers offered staff discounts and upskilling opportunities.Forty-three percent offered a commission or incentive based on sales, while one in five offered KiwiSaver contributions above the minimum requirements.Young said perks were a way to offer something extra to staff."Retail is about customer service, and customer service is about engaging with people and talking and helping them through their journey through someone's store," she said."If you do that, you're going to increase sales and growth and that's what retailers want to reward their staff with."