After a slow summer of trading, New Zealand retailers are not feeling positive about their business prospects as they head into winter, according to Retail Radar’s latest quarterly survey of Retail NZ members.
“The post-election optimism recorded in the Retail Radar survey at the end of 2023 has dissipated as retailers struggle with inflation and soaring costs. Skyrocketing insurance costs and a lack of consumer confidence are impacting heavily on profitability,” said Retail NZ chief executive Carolyn Young.
In the Q1 2024 survey, 64% of respondents reported they did not meet sales targets for the January-March period and almost a third of businesses (32%) are unsure whether they will survive the next 12 months. “This is more pessimism than we saw in the equivalent period of 2023 when 28% of businesses were not feeling confident of survival,” Young said. With no improvements expected in the short-term economic outlook, more than half (55%) of respondents said they do not expect to meet their targets in the April-June quarter.
Inflation remains the most significant issue (62%) for retailers, followed by insurance cost increases (55%) and wage increases (52%). “As we enter the traditionally slower winter months, retailers will be tightening their belts in anticipation of slow sales and uncertainty. Retail NZ is hoping the government’s budget will help restore confidence to the marketplace and provide a pathway out of recession,” said Young.
