The latest Retail NZ Sales Index shows sales remained buoyant through May but there continues to be real pressures on retailers.
Retail sales in May were up 37 per cent compared to May last year, and 30 per cent compared to May 2019.
Retail NZ Chief Executive Greg Harford says the Sales Index is one measure of retail spending and records average daily sales per site at some Retail NZ members.
“The relatively positive results mask significant challenges across the retail sector, however, with some businesses underperforming,” says Harford.
“Those businesses performing below average include central city retail sites in the main centers, where customer foot traffic remains down as people work from home; and those in tourist centers such as Queenstown and Rotorua.”
While the index shows strong spending from New Zealanders, retailers are also facing substantial cost increases.
“There have been significant increases in the Minimum Wage over the past few years; the cost of managing employee sick leave is set to double as a result of recent Government changes; the cost of freight has skyrocketed since the COVID-19 pandemic began, and their substantial electricity price increases looming,” says Harford.
“All of these factors create significant challenges for retailers, and we will start to see price increases flowing through to customers over the coming months.”