Retailers across New Zealand are showing renewed confidence in the face of ongoing economic challenges.
This is according to the latest Retail Radar report from Retail NZ.
Covering April to June, the quarterly survey shows that 69 per cent of retailers are confident or very confident their business will survive the next 12 months – a notable increase from 57 per cent in the same quarter last year.
According to Retail NZ, this aligns with the findings of the recent NZ Institute of Economic Research’s Quarterly Survey of Business Opinion for Q2 2025, which found retailers were more optimistic about the economic outlook than other sectors.
Retailers were 13 per cent more likely to expect better general economic conditions over the coming months than the general business population.
The optimism recorded in Retail Radar comes despite 62 per cent of retailers failing to meet their sales targets in the past quarter. But expectations are improving, with 60 per cent anticipating they will meet or exceed targets in the next three months – up from 49 per cent in Q1 2025 (January-March) and 32 per cent in the April-June period last year.
“Retailers are resilient,” Retail NZ CEO Carolyn Young said. “While the economic environment remains uncertain, the sector is showing signs of cautious optimism, supported by inflation at 2.7 per cent, steady OCR at 3.25 per cent, and a slight uptick in card transaction spend.”
Recent Stats NZ data shows retail sales volumes rose 0.8 per cent compared to the last quarter of 2024, though growth remains modest at 0.65 per cent year-on-year, and still below 2023 levels.
Retailers continue to grapple with a range of issues according to Retail NZ, including cost of living pressures, insurance, lease and rent increases and freight costs.
“In spite of the confidence expressed by Retail Radar respondents, we are continuing to see retailers across the country shutting their doors due to increased pressure on cost of living, lease and rates increases,” Young said.
Following a recent trial by Foodstuffs North Island and guidance from the Office of the Privacy Commissioner, Retail NZ also asked members if they were likely to use Facial Recognition Technology (FRT) to combat retail crime.
Only a small number of larger retailers are considering adopting FRT. The main barriers raised by respondents about use of FRT include, implementation and maintenance costs (69 per cent), potential public backlash (36 per cent), and the need for more evidence of effectiveness (32 per cent)
“FRT may be a useful tool for some, but it’s not a one-size-fits-all solution,” Young said. “We know that FRT has proven to be effective in identifying recidivous offenders in-store. However, it requires a considerable commitment to implement, train and maintain FRT in-store.”