Report shows challenging months for NZ retailers

Retail NZ’s latest Retail Radar report has revealed a challenging start to 2023 as the unstable performance in the first three months and the end of the summer peak season has produced mixed results across New Zealand’s retail sector.  

“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.”  

Mr Harford also highlights Auckland’s flooding and Cyclone Gabrielle as significant issues that have not only impacted the lack of sales but also caused huge damage to road and infrastructure. 

The external cost pressures outside of retailers’ control, such as supplier costs, wages increase, and increases in rent, continue to drive up prices. Insurance price increases have also been noted as a newly building contributor to higher prices.  

“As expected, and signaled in the last quarter, inflation continues,” Mr Harford says. 

“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.”  

Despite the minimum wage increase on 1 April, retailers in the last three months have been facing issues when factoring in the wage increases. 

Inflation and the lack of consumer spending have contributed 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,” Mr Harford says.  

“And shop locally, or from a New Zealand website, throughout these coming months.”