25 October 2023
Increasing costs and election uncertainty impacted retailers in the quarter ended 30 September 2023. Our survey of retailers showed that they were in a holding pattern during the third quarter, with issues such as inflation, increasing wage, freight and lease or rent costs continuing to impact many. The political environment with the recent General Election also created uncertainty for many retailers.
The Retail NZ Sales Index shows that sales are slow, increasing just 0.5% on the same month of the previous year. Alongside this, inflation has fallen for three consecutive quarters and, while still high at 5.6%, it is looking increasingly likely that the peak has been reached. Significantly, 59% of retailers reported increasing their prices, driven by increases from suppliers.
Confidence levels fell for the third consecutive quarter, with just 57% of respondents feeling confident or very confident that their retail business would survive the next 12 months. The fourth quarter is always critical for retailers with three key sales markers with Labour Weekend sales, Black Friday sales and the Christmas promotions. Many retailers rely heavily on strong sales during this period to ensure they have a buffer for quieter months during the year. While there are some positive signs ahead with more retailers being optimistic on their ability to meet their sales targets in the next quarter as we move into the warmer months and the busy festive season. The fourth quarter of this year will be critical for many businesses and will give us a clearer indication if consumer confidence has returned and we may avoid a recession.
Access Retail Radar Report Q3 here.
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