19 January 2023
The typically busy Christmas peak has produced mixed results for retailers, with most failing to hit targets and inflationary pressure continuing, according to the latest Retail Radar report by Retail NZ.
“The softened consumer demand during the typically peak season for retailers has unfortunately hit home over Christmas. While 63 per cent of retailers had expected to hit their sales targets for the quarter, only 34 per cent managed to achieve this,” Retail NZ Chief Executive Greg Harford said today.
“The soft performance during busy period has led to a pessimistic outlook for the sector going forward. Half of retailers are expecting not to meet sales targets in the next three months, and 30 per cent are not confident their business will survive the next 12 months. This demonstrates the seriousness of the challenges faced by the sector.”
“Additionally, price increases are likely to continue, with retailers impacted by external factors pushing up prices. 92 per cent of retailers report that supplier price increases are the biggest factor, whilst freight and wage increases are also influencing factors.”
“On average, Retail NZ members reported that prices rose by around 7.7 per cent in the last quarter, and forecast an addition 7.1 per cent increase in the first quarter of 2023. While retail prices are only one factor in the official Consumer Price Index, this does show that there are still significant headwinds facing the economy.
“Inflation continues to be a critical ‘top of mind’ issue impacting retail operations, as does supply chain pressures, and employee shortages.”
You can read the full Retail Radar report from Retail NZ here.
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