The latest Retail Radar survey from trade association Retail NZ covered the year's opening quarter.
In a concerning outcome, 64 per cent of respondents stated they did not meet sales targets for January-March. Furthermore, 32 per cent are unsure whether they will survive the next 12 months.
Respondents do not expect their sales to improve immediately, with 55 per cent reporting they do not expect to meet their targets. CEO Carolyn Young said retailers are facing a range of issues.
“This is more pessimism than we saw in the equivalent period of 2023 when 28 per cent of businesses were not feeling confident of survival,” she said.
“The post-election optimism recorded in the Retail Radar survey at the end of 2023 has dissipated as retailers struggle with inflation and soaring costs. Skyrocketing insurance costs and a lack of consumer confidence are impacting heavily on profitability.”
Inflation was the biggest issue facing the industry, according to 62 per cent of retailers. Almost 60 per cent said their insurance costs have increased significantly in the past year.
There was also significant concern about insurance (55 per cent) and wage increases (52 per cent).
“Inflation is affecting all business costs, plus consumer spending is slowing with retailers reporting that customers are shopping less and buying less when they do shop,” Young added.
“As we enter the traditionally slower winter months, retailers will be tightening their belts in anticipation of slow sales and uncertainty. Retail NZ is hoping the upcoming Federal Budget will help restore confidence to the marketplace and provide a pathway out of recession.”
Business owners have also expressed concern about rising levels of crime targeting retailers.
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