Retailers across New Zealand are warning they may need to raise their prices if the unrest in the Middle East continues for a sustained period
This is according to Retail NZ CEO Carolyn Young, and comes amid conflict between the United States and Iran, which is impacting the flow of shipped goods globally.
“Like many sectors, retailers are watching the events unfolding in Iran with concern,” Young said. “The human impact of this violence is distressing and is also starting to have wider ramifications around transport and sources of fuel.
“As we have seen before, when key shipping corridors are closed and oil supply chains are disrupted due to escalating tensions in the Middle East, New Zealand is not immune to the effects. While we are yet to see those impacts flow through to retail, if the conflict persists, it will begin to affect fuel prices and shipping costs.”
Young says retailers do try to absorb small increases where they can, but their ability to do that is limited. She added that NZ retailers have already had an incredibly tough trading environment over the last several years.
“Many of our members are still struggling and cannot afford to absorb additional costs, particularly over a prolonged period,” Young said.
"Higher prices are not what any of us want to see, but in such a tight economic environment, there is minimal ability for many business owners to cushion the impact of such a global crisis. It is inevitable that if this conflict continues for some time, some of those additional costs will have to flow through to the consumer.”
These comments come as the value of actual fashion sales across New Zealand slipped by 2.3 per cent in the December 2025 quarter compared to the same time in 2024.
According to data from Stats NZ, fashion sales values for the quarter hit NZ$1.499 billion, which is expectedly up on the September 2025 quarter, but failed to pass the NZ$1.5 billion recorded in December 2024.
Despite this sales slip in the December 2025 quarter for fashion, total core retail spending, which excludes motor vehicles and fuel, lifted by 0.8 per cent year-on-year, in actual terms. This was driven by lifts in sales across supermarkets by 5.4 per cent, as well as pharmaceutical retailing (up 5.9 per cent), accommodation (up 8.6 per cent), and food and beverage services (up 4.2 per cent).