Peak body Retail NZ has seen a bounce-back in retailers’ confidence in the second quarter of 2026, after a dip in Q1 driven by the spike in fuel prices.
The Q2 2026 Retail Radar report, based on the responses of Retail NZ members, shows 69 per cent of retailers are confident of surviving the next 12 months, up from 61 per cent in Q1.
Meanwhile, 61 per cent of retailers are expecting to meet or exceed their sales targets in the next quarter (Q3), which Retail NZ called a much rosier outlook than the 34 per cent expecting to meet or exceed targets in its last survey.
“It’s great to see confidence levels returning to what we consider normal this quarter, after the shock felt in the sector due to tensions erupting in the Middle East at the end of February and through March,” Retail NZ CEO Carolyn Young said.
“We’ve also seen the proportion of retailers identifying freight costs as a primary concern drop back from a peak of 79 per cent in Q1, to 63 per cent this quarter. While that number is still higher than we’ve seen in our 2024 and 2025 surveys, the fact we’re yet to see diesel and petrol prices return to the extreme highs we saw in April will be providing some comfort for retailers despite the ongoing tensions.”
Despite the rosier update, New Zealand retailers’ primary concern remains the cost of living, driven by high inflation and unemployment, but interestingly, concern around credit and debit card fees has dropped out of the top five.
Young said card payment fees had been a major worry for Retail NZ members when there was talk from the Government about implementing a ban on card payment surcharges.
“Now that we know that won't be progressing this year, combined with the recent cap on domestic credit card interchange fees, retailers are much less nervous in this space, with just 23 per cent identifying it as a concern,” Young said.
The Retail Radar Q2 survey also found retailers are increasingly accepting Buy Now Pay Later (BNPL) as a payment option for both small and large purchases, but the jury is still out on whether it is worthwhile.
With increasing research and commentary in the BNPL space from a consumer perspective, Retail NZ wanted to get an understanding of how it was impacting retailers. Carolyn Young said it is clear this is no longer a niche payment option in New Zealand.
“Almost half (47 per cent) of respondents said they offered Buy Now Pay Later, with our members telling us their customers are using it for everything from small impulse buys through to big purchases worth thousands of dollars,” Young said.
“While it’s becoming an increasingly popular payment option for customers, the fees are much higher than credit card or contactless charges. As a result, our members have mixed views on whether offering Buy Now Pay Later is worth it for their business; about 45 per cent of those surveyed said it is worth it, but almost 38 per cent said it wasn’t. Another 22 per cent were undecided.”
Carolyn Young added that while some members said they felt it was more likely a customer would purchase an extra item they might not have otherwise if they offered BNPL, almost 56 per cent said they hadn’t actually noticed any difference in overall basket size from BNPL customers.
"It will be interesting to see how retailers’ views of Buy Now Pay Later changes in the coming years as it matures as a payment option, and as the economic environment changes,” Young said.