International cardholder expenditure data through the Paymark network shows spending increased by 32% over the 12 months ended May compared with the previous year.
Monthly growth rates have averaged over 30% since the Rugby World Cup, well ahead of national growth rates, which averaged 11%.
Mayor Jono Naylor said retail continues to be a strong performer in our local economy.
"It's really encouraging to see continued growth in the retail sector."
Events such as the New Zealand Cycle Classic and the NZCT Women's Cycle Tour of New Zealand, which are now hosted in Palmerston North, boosted retail sales growth in January and February this year.
There has also been an increased international recognition of the attractions available in the city. One of the important contributors to the growth is likely to have been the opening of the revamped New Zealand Rugby Museum in August last year, which has been attracting three to four times as many visitors as previously.
Conventions data also shows strong growth in the number of international visitors to the city, with 4,500 international delegate days recorded in the Manawatu region in the year to March 2012, a 64% increase from the previous year.