NATIONAL: A chronic shortage of employees in the New Zealand retail market could overshadow its steady return to form, key Australian retailers have claimed.
The latest figures from Statistics New Zealand indicate trading conditions for businesses are starting to improve in the wake of the global financial crisis, with seasonally adjusted core retail sales in August up by 1.2 per cent on July.
However, while some Australian companies operating in the market have embraced the news, many believe staffing problems may limit their ability to capitalise on these stronger conditions.
Cue Clothing Company chief executive Rod Levis has reported a “big jump” in recent sales, with September figures up 23 per cent on the previous month. The Sydney-headquartered fashion chain currently operates 20 stores across the North and South islands under the Cue and Veronika Maine brands.
Levis said staffing problems had longed plagued the company’s New Zealand operations, despite the country’s unemployment rate jumping from a low of 3.3 per cent in December 2007 to 5.8 per cent in June 2009.
“It’s very hard in New Zealand finding good staff,” he said. “Talk to any of the retail employment agencies – it is a fact. We have a qualified lawyer as one of our most senior area managers. I guess that’s an indication that quality is looking to retail, but it’s minimal.”
Levis credited his staff with being largely responsible for the increase in his company’s latest sales figures, but said the global financial crisis had only served to highlight the seriousness of the employee shortage.
“The stronger and better retailers who have better staff are performing better. When the economic climate becomes difficult, obviously the staff have more impact on the bottom line. So our problems in New Zealand are 99 per cent staff-related.”
Retail Apparel Group, which operates a total of 14 Tarocash and YD stores in New Zealand, has also faced difficulties sourcing employees.
Chief executive Gary Novis said retaining strong retail staff was now more important than ever, with the group opening two new stores in Christchurch earlier this month.
“Both have opened really well, but it’s a continuous challenge for us to get great people in the stores, and we always find it’s harder to get good people in New Zealand than it is in Australia. It’s a smaller market to pull from. Once you’ve got good people, the challenge is to make sure we retain that skill.
“We put a lot of time and effort into training and developing our team. We’ve also invested more money in people and we now have put on a person who is responsible for New Zealand at a regional management level.”
New Zealand Retailers Association chief executive John Albertson said Novis has the right approach.
“Our advice to members is, just because things are tough, you can’t stop training,” Albertson said. “Very often the thing that makes the point of difference between store A and store B is the quality of the staff.”
Other Australian retailers have also continued to invest in the country, with Levis revealing that he had added three stores to his New Zealand base in the last 12 months. Value retailer Cotton On has been particularly aggressive, with 52 stores currently open and an additional 13 openings planned before Christmas.
Novis said Retail Apparel Group planned to operate 15 Tarocash and 15 YD stores in the medium to long term, while Levis confirmed the company’s current focus was on refurbishing existing outlets.
The rising value of the New Zealand dollar was another aspect that Australian retailers were keeping a watchful eye on, Levis said.
“Our overall strategy is to maintain prices. We notice a lot of our competitors are not converting to the New Zealand dollar as per the official rate, and neither are we. We’re all discounting our margin a little to maintain a more viable price point in New Zealand.”
Albertson predicted the strength of the New Zealand dollar will be an ongoing stumbling block.
“When we go beyond Christmas, we have to be very aware that a lot of the recovery in New Zealand is being led by consumption rather than by strong export growth. I think we’ve got some structural issues to resolve before we can comfortably say we’re past the worst of it.”
Erin O’Loughlin