Trade statistics in in the June quarter have shown a better than expected sales in the retail industry, yet according to Retail NZ’s Radar Report, our retailers are still missing sales targets.
The report shows that half of surveyed retailers hadn’t met their targets, with 36 percent not expecting to hit sale targets in the next quarter either.
Greg Harford, Retail NZ’s general manager, says that although the sector itself is performing well, its smaller locally owned businesses that are feeling the pressure.
“Smaller businesses are finding it tough to compete," he says. "The outlook for the present quarter has taken a negative turn with just 64 percent expecting to meet or exceed targets in the next quarter. This is a significant drop from 75 percent previous and is the lowest level we have ever recorded in our Retail Radar survey.
"Retailers face substantial pressures in rents, wages, and insurances, and the decline in the value of the dollar will mean imported goods cost more over the coming months. These cost pressures are compounded by the highly competitive retail environment, meaning that even small cost increases can be strongly felt by retailers operating on very tight margins.
"Retailers will be optimistic that the Reserve Bank's announcement that interest rates will remain low over the next 12 months, and that expected increases in state sector wages will mean increased consumer spending over the remainder of the year."