New Zealand retailers are heading into peak season more confident than they have been all year, despite record fuel prices, a weak Kiwi dollar and rising business costs.
Retail NZ’s latest Retail Radar report, which surveys the industry body’s members, found 73.7 per cent of retailers are confident their business will survive the next 12 months. That is five points above the 68.7 per cent average across the previous eight quarters, while the share who are not confident fell to 6.7 per cent, against an average of 9 per cent.
“We’re seeing strong confidence levels among retailers despite the continued pressures from high fuel prices, inflation and unemployment, a weak Kiwi dollar, muted consumer spending, and rising business costs,” Retail NZ CEO Carolyn Young said.
Looking ahead, 75.1 per cent of respondents expect to meet or exceed their targets in the final quarter of the year. The share expecting to beat their targets rose to 10.5 per cent, about double the average of the previous eight quarters.
“This tells us most retailers feel they have their settings right as they head into the festive trading season,” Young said.
The survey closed before the recent Official Cash Rate review and a further drop in the NZ dollar, but while fuel prices were climbing to record levels. Young said that doesn’t mean trading conditions are easy, but there is a growing sense that businesses can weather the current environment.
Recent trading results may also help explain the shift in sentiment. Over the previous two years, an average of 60.7 per cent of retailers reported missing their targets each quarter. In Q3, that fell to 53 per cent.
The broader backdrop remains tough. The report noted inflation is at 3.7 per cent, unemployment was 5.6 per cent for the June quarter, and consumer confidence remains below its ten-year average. One respondent pointed to the pressure on discretionary categories, noting higher fuel and grocery costs leave shoppers with less to spend on clothes and shoes.
With New Zealand’s general election days away, Retail NZ also asked members what the next government should prioritise. Stabilising fuel prices topped the list, followed by keeping policy stable between governments, lowering card and payment fees, making overseas online platforms follow the same rules as local retailers, and lowering business electricity costs.
“Businesses make long-term decisions and every significant policy change comes with compliance costs, uncertainty and disruption,” Young said.
On specific policies, 87.6 per cent of retailers want large online platforms such as Temu and Shein held more accountable for product safety, and 88.5 per cent support changing how electricity is priced so bills come down. A ban on passing card surcharges on to customers divided opinion, with 47.4 per cent opposed.
“The message to the next government from retailers is clear: reduce the cost of living, lower the cost of doing business, and provide greater certainty for businesses,” Young said.