Source: Radio New Zealand
Eighty-five percent of retail sales rely on foot traffic. Ke-Xin Li / RNZ
Most retailers fear they won’t meet their sales targets this quarter.
Retail NZ’s latest survey finds the ongoing fuel crisis has business owners feeling pessimistic, as consumers spend less at retail.
Chief executive Carolyn Young said the last survey found retailers optimistic for the new year.
“The start to the year was really strong, with some positive sales in January and February, and that gave us optimism about the year ahead,” she said.
“The crisis in the Middle East and the subsequent significant escalation of fuel crisis that has really impacted the whole of New Zealand has meant retailers are now very conservative, very concerned about the economy and consumer confidence.
“The start of the year, everybody thought we were maybe out of the woods, but this has really scuppered how we’re going to move forward.”
She said two-thirds of retail businesses predicted they would underperform this quarter.
“Sixty-six percent predicted that, in quarter two, they wouldn’t meet sales targets, as a result of the current situation that we’re in,” Young said. “They cited the economy as the most significant concern, with 92 percent of people responding saying that was their major concern.
“The items that fell in after that were really around foot traffic in the city, high street vitality and consumer demand – they’re the key things that will ensure retailers continue to stay open.”
Young said foot traffic remained essential.
“Eighty-five percent of sales in retail in New Zealand happen in stores, so we need people on the street, we need vitality in our shopping districts and we need consumers to be positive,” she said. “We know that consumer confidence has fallen and it’s not surprising.
“That has been one of the key factors that has turned the optimism from the start of the year into a very pessimistic outlook.”
Young said businesses were considering their options.
“Fifty-three percent of our respondents said, as a result of the fuel crisis, they were considering putting up their prices to cover increased costs they’re seeing from freight coming in and going out,” she said.
“We know from retailers that they have increased prices for recycling pick-up, rubbish pick-up, and all of those sorts of things have added onto the costs and squeezed margins.”
She said 49 percent of respondents said they were trying to absorb the costs where they could, while 18 percent were considering cutting staff hours to compensate.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand