8 July 2022
The Quarter 2 Retail Radar report from Retail NZ shows that rising operating costs like wages and freight, staff shortages and lack of foot traffic are the key pressure points on retailers. On average, across the sector, prices increased by around six per cent in the last quarter with a similar outlook for quarter three.
“Quarter two was variable across the retail sector. Just over half of retailers failed to hit their targets for the quarter, while 46 per cent of retailers met or exceeded them. This is a slight improvement on the first quarter of 2022. However, margins are tight due to cost increases and foot traffic is low” says Retail NZ Chief Executive Greg Harford.
“The cost of operating a retail store has significantly increased, in particular freight and shipping related costs, as well as the cost of labour and low foot traffic has created significant pressure. For many retailers, the reality is they are not able absorb these new costs, instead passing them on to the consumer through price increases.”
“Inflation is having a significant impact and, as a result, consumers can expect further price increases on products. 71 per cent of retailers increased prices in the last quarter at an average of six per cent. Looking ahead a greater cohort of 81 per cent of retailers will be increasing prices in the next quarter – again at an average increase of six per cent. This suggests that high inflation will likely continue through the rest of the year.
“Retailers are looking for certainty of foot traffic and stability in the economic environment. Changes in these areas may see the 32 per cent of business owners not confident they will survive the next 12 months become confident in the next quarter.”
You can find the full Retail Radar report from Retail NZ here.
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