Relax, winter will bite into inventories

  • Opinion
  • July 19, 2016
  • Warren Head
Relax, winter will bite into inventories
Image: Kerryn Smith

The country’s record-breaking warm weather generated forecasting havoc in the retail sector.

You could sense the satisfaction of retailers when Wellington had its hottest February on record, boosting summer sales. The second warmest autumn on record in March and May would’ve caused some lip-biting for apparel retailers.

Inventory cleared faster last month, starting in the south. There was an expectation that outdoor retailers such as Kathmandu would fell the warm autumn weather, but Kathmandu only recently brought its winter range in-store.

Rest assured in June and July it will again be winter. This is when Kathmandu will hold its winter sale. The first snow was falling lower in the high country as I wrote this column.

Yet it is evident that core sales volumes (excluding fuel and auto sales) underscored a slowing trend of one percent for the March quarter, with seven of 15 sectors contracting.

Apart from the weather, the summer saw building consents falling off. The effect on mortgage payments of the mind-blowing ratio of property values in Auckland and Central Otago versus annual household income (9.5x and 10x respectively) might account for the falling sales of furniture.

House prices would drive you to drink on both sides of the buyer and seller equation. Food and beverage services jumped to 1.3 percent quarterly growth from 0.7 percent.

Yet Auckland’s economic momentum is accelerating and it was the top retail region in the first quarter. The South isn’t far behind and Canterbury is keeping up. However, of six regions, only three are in positive territory.

ASB economist Daniel Snowden said the retail sales report highlighted why further rate cuts are needed. “At face value, 0.8 percent quarterly growth in volumes may seem pretty robust,” said Snowden. However, accounting for the strong growth in population, strengthening tourism and the building boom, the retail lift is moderate, he said, suggesting that retail spending momentum has slowed from the growth achieved over mid-2014 to mid-2015.

The best performance by a major retailer this autumn has been by Briscoe Group, with strong same-store sales growth and margin expansion. “Rebel Sport continues to impress, while homeware also reported an acceleration in same-store sales growth,” says Chelsea Leadbetter, retail analyst at Forsyth Barr. Margins and profit are tracking ahead of last year.

Meanwhile, tourism’s rapid growth (+20 percent lift in arrivals in the last two years) will be helping resort areas and retail in airport precincts.

The 2015 to 2016 period has been a honey of a year for Comvita, the processor, exporter and retailer of Manuka honey products. Exports helped Comvita to a 68 percent higher annual profit of $17.2 million.

New Zealand sales were flat but only because Comvita pulled some of its products from the big supermarket chains, impacting on sales growth and margin.

Leadbetter commented that sales were made through other higher-margin channels, including the company’s own retail stores. Comvita’s store at Auckland Airport was a great performer thanks to the growing numbers of visitors from China (+34.4 percent in the full year of 2015, with 355,904 arrivals).

Customers also now have the opportunity to experience the pristine source of this Kiwi retail success via a virtual reality (VR) experience in Comvita’s retail stores at Auckland Airport, the Viaduct and at Experience Comvita in Paengaroa.

Virtual and augmented reality was a strong theme at the recent Tripartite Economic Summit in Auckland. The talk was that 360 degree visuals will soon be on smartwatches, which you will use like a cursor.

This story originally appeared in NZRetail magazine issue 744 June / July 2016

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

Sponsored Content

Modernising Your Retail Environment | The Importance of Technology in The Retail Experience

As we move towards an increasingly digital future, technology is playing a vital role in the retail sector.


The Christmas shopping culture

  • Opinion
  • December 13, 2019
  • Makayla Wallace-Tidd
The Christmas shopping culture

The Register writer Makayla Wallace-Tidd talks about the Christmas shopping experience in the retail environment. What can consumers expect, and how are retailers catering to the needs of their customers?

Read more

See out 2019 with the December / January issue of NZ Retail

  • News
  • December 13, 2019
  • The Register team
See out 2019 with the December / January issue of NZ Retail

The final issue of NZ Retail for 2019 is winging its way to subscribers now. Themed around inspiration, it offers features on international arrivals, the sporting goods category, what 2020 holds for our regional retailers, and advice on sustainability.

Read more

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

2020 vision
What does the next decade have in store ...
Concept to closet
Business coverage of New Zealand Fashion Week.
Regional rollercoaster
What does retail look like in 2019 for ...
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
The future is bright
We spoke with four retailers in their twenties ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
All things to all people
Kiwi retailers share their omnichannel strategies.
How to open a store
Sarah Dunn considers what it would take to ...
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...

Gem Retail Hotlist: Benjamin Black and regional retail

  • News
  • December 12, 2019
  • Sarah Dunn
Gem Retail Hotlist: Benjamin Black and regional retail

Our 'Best provincial retailer: South Island' award was hotly contested in the Gem Retail Hotlist, but in the end, it was Nelson jeweller Benjamin Black that won. Find out more about this boutique craft jeweller.

Read more

The retail diary: December / January

  • News
  • December 11, 2019
  • Sarah Dunn
The retail diary: December / January

The Register and NZ Retail team has rounded up retail-relevant events and important dates for December and January.

Read more

Kiwis predicted to spend more on Christmas than Australians

  • News
  • December 11, 2019
  • Makayla Wallace-Tidd
Kiwis predicted to spend more on Christmas than Australians

New research has found that Kiwis will be spending up large on Christmas in 2019 while Australians will be taking a more conservative approach to the Christmas budget. However, Kiwis are still focused on trying to lower their Christmas spending, and retailers have been warned to keep pricing strategies transparent.

Read more
Next page
Results for
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

The Register

Content marketing/advertising? Email or call 022 639 3004

View Media Kit