Retail NZ’s most recent Retail Radar report found that 43 per cent of retailers are unsure of future prospects, a remarkable rise since the 32 per cent figure in the previous quarter.
More than 70 per cent of retailers stated they did not meet sales targets in the previous quarter. This increased from a figure of 64 per cent in the first quarter.
Retailers expressed concern about covering costs in the coming quarter due to weak sales. CEO Carolyn Young said pessimism about trading conditions has deepened in recent weeks.
“This is traditionally the quietest time of the year for retailers but they are really struggling for sales right now,” she said.
“Worryingly, most retailers are not expecting trading conditions to improve through the July-September quarter, with only 2 per cent saying they expect to exceed their targets.”
Inflation and cost of living were reported by 79 per cent of retailers as the leading issues for their business.
Despite the prevailing pessimism, Young said that there are signs of relief in the near future.
“Summer still feels a long way off, but I’m confident we are seeing the first signs of the economy warming up,” she said.
“We are getting nearer to the Reserve Bank’s target range for inflation of 1-3 per cent, indicating that a cut in the Official Cash Rate is closer than previously expected.
“This will lead to a turnaround in consumer confidence and a greater willingness to support local retail businesses.”
Young also expressed concern about the 8 per cent of retailers who said staffing issues impacted their ability to take days off. She said this added additional mental and physical pressure on business owners.
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