7 July 2023
The latest Retail Radar report from Retail NZ confirms that trading challenges are continuing for retailers.
“Many of the challenges that retailers reported last quarter have continued into the winter months, with inflation, increasing wage costs and retail crime proving stubborn. 59 per cent of retailers did not meet their sales targets over the past three months, a substantial increase on the 44 per cent recorded in the previous quarter” says Retail NZ Chief Executive Greg Harford.
“Much of the same outlook continues for the next three months, with half of all retailers not expecting to meet targets again in the third quarter of 2023.”
“Cost increases continues to be the number one issue keeping retailers up at night. Domestic inflation is resulting in increased costs across the board, with wage costs and freight costs hitting retailers the hardest. However, price inflation might be slowing with the average price increase sitting at 4.3 per cent, down from 5.4 per cent last quarter. With 60 per cent of retailers increasing prices in the past three months.”
“Most concerningly, 36 per cent of retailers report that they are not confident, or not sure if they will survive the next 12 months. We have not seen these levels since the worst of the COVID-19 crisis. Over the last few months, we have seen a significant number of retail businesses take the decision to close their doors, and these latest numbers show that many businesses are on a knife edge.”
“Some businesses are continuing to perform strongly. However, with the majority of retailers being owner-operators, there is significant pressure from the tight trading conditions, lack of sales, and increased cost of doing business, along with higher interest rates.”
The full Retail Radar report from Retail NZ is available here.
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