Local retail feels impact of dairy downturn

milkRetailers in Taranaki say the downturn in the dairy market is starting to hit turnover, with sales declining by between 10 and 20 per cent This is according to Taranaki reporter Robin Martin on Radio New Zealand news.

“Fonterra has slashed its forecast payout for the season to $3.85 a kilo of milk solids – far below the break-even point for many farmers, whose spending on non-essential items has all but evaporated,” said Martin.

“Fonterra’s new forecast payout is $3.85 a kilo of milk solids, which is below break-even for many farmers.”

Michael Eager, who owns the RJ Eager furniture stores in New Plymouth and Stratford, said it was taking longer to shift stock.

“We are already seeing a slowdown in retail sales. Enquiries have dropped away so it is impacting at the present time quite strongly and particularly in the small towns,” he said.

“We have a business in Stratford, and we’re seeing that impact take place now.”

Eager said farmers were simply not out shopping.

“They’re just not coming in, they’re just not out there, they’re not shopping, they’re not looking for things. They’re certainly not shopping at all, they are not even coming into the stores,” stressed Eager.

Eager said his sales were down between 15 and 20 per cent and he expected them to drop further.

“Retailers will have to tighten their belts along with farmers,” he said.

“We’re just going to have to think smarter, we’re going to have to watch our overheads and we’re going to have to keep all our staff working on minimum hours and we’re just going to have to watch everything we do.

“Hopefully we can ride things out, that’s what we’ll be doing. We’ll just batten down the hatches and just go from day to day really.”

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