30 May 2024

The struggling retail sector will see some silver linings from today’s Budget announcements but little immediate prospect of a turnaround in consumer spending, Retail NZ says.

“We welcome the Government’s increased spending on policing, serious youth offenders and rehabilitation of offenders. With retail crime continuing to be a huge issue for our members, we are pleased to have confirmation of plans for more Police on the beat and more efforts to turn around the lives of offenders,” Retail NZ Chief Executive Carolyn Young says.

“There was also good news on plans for infrastructure improvement. Along with the planned changes to the Resource Management Act, this will add resilience to our regions by supporting robust supply chains for freight, and offering an easier path for developments.”

More broadly, Retail NZ hopes that bigger investment in education will increase work-readiness in young people. This is one of the major challenges for retail employers, with members regularly reporting that young people lack the basic skills needed.

It was good to see the detail of the promised tax cuts and retailers around the country would be hoping to see that translated into spending at the till, Ms Young said. However, it was unlikely to provide immediate relief.

“In just the last two days, we’ve heard that Smith + Caughey’s is likely to close next year and Flybuys is pulling out of New Zealand, with the loss of hundreds of jobs. The tax cuts won’t kick in for two months and with signals from the Coalition Government that there will be no return to surplus for several years, Retail NZ is not expecting to see any improvement in consumer confidence. 

“So retailers are unlikely to see an uplift in spending for some time. Our members will need to continue tightening their belts in anticipation of slow sales until confidence returns to the marketplace.”

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