New Zealand retailers are struggling with external pressures across the country, including wage increases, according to peak body Retail NZ’s latest Retail Radar Report.
Retail NZ CEO Greg Harford said many in the North Island are being impacted by weather events, with external pressures driving up prices across the country.
“There is a mixed bag of performance across the sector, with 36% meeting their sales target and 44% not meeting expected sales targets,” Harford said of NZ retailers.
“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.
“Auckland’s flooding and Cyclone Gabrielle were significant issues, as the impacts of the lack of sales, and damage to road and infrastructure was felt.”
Harford said price rises are driven by factors such as supplier costs, wage increases and increases in rent.
“Insurance price increases has also been noted as a newly building contributor to higher prices,” Harford said. “As expected, and signaled in the last quarter, inflation continues.
“With 68% of retailers increasing their prices in the last 3 months at an average of 5.4%, which is down on the forecast 7.1% that was expected.”
“Unsurprisingly given the 1 April Minimum Wage increase, the biggest issue facing retailers in the last three months has been factoring in the wage increases, with inflation continuing to impact all businesses, as is the lack of consumer spending.”
According to its Retail Radar Report, the top concern among NZ retailers is wage increases (70%), followed by inflation.
It also found that increases in costs by suppliers is a key driver of price increases across 86% of NZ retailers.
“All this contributes to 28% of retailers being either unsure or not confident they will survive the next 12 months – similar to the previous quarter,” Harford said.
“Retail NZ is asking Kiwis is to ensure you support your local retailers at this time, and shop locally, or from a New Zealand website, throughout these coming months.”