17 April 2023
A mixed performance in the first three months, and end of the summer peak season has produced mixed results across the retail sector. This represents a challenging start to the year says Retail NZs latest Retail Radar report.
“Retailers across the country have had a mixed start to the year, with many in the North Island being impacted by weather events and the vast majority impacted by external pressures driving prices increases” says Retail NZ Chief Executive Greg Harford.
“There is a mixed bag of performance across the sector, with 36 per cent meeting their sales target and 44 per cent not meeting expected sales targets. Confidence continues to remain comparable to the previous quarter with almost half of retailers not expecting to meet their sales targets in the next three months.”
“Auckland’s flooding and Cyclone Gabrielle were significant issues, as the impacts of the lack of sales, and damage to road and infrastructure was felt.”
“External cost pressures outside of retailers’ control continue to drive up prices. Price rises are driven by factors like supplier costs, wages increase, and increases in rent. Insurance price increases has also been noted as a newly building contributor to higher prices. As expected, and signaled in the last quarter, inflation continues. With 68 per cent of retailers increasing their prices in the last 3 months at an average of 5.4 per cent, which is down on the forecast 7.1 per cent that was expected.”
“Unsurprisingly given the 1 April Minimum Wage increase the biggest issue facing retailers in the last three months has been factoring in the wage increases, with inflation continuing to impact all businesses, as is the lack of consumer spending. All this contributes to 28 per cent of retailers being either unsure or not confident they will survive the next 12 months – similar to the previous quarter.”
“Retail NZ is asking Kiwis is to ensure you support your local retailers at this time, and shop locally, or from a New Zealand website, throughout these coming months.”
You can read the full Retail Radar report from Retail NZ here.
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