Retailers unsurprised by slowdown

calculator, finance, reportStatistics New Zealand revealed last week that retail sales growth had eased in the June 2015 quarter after big gains in recent quarters.

The total sales value was $18.9 billion in the June 2015 quarter, 4.1 per cent or $749 million more than in the June 2014 quarter. This follows a 5.1 per cent or $932 million increase in the March 2015 quarter.

Retail NZ has responded by saying that while the slower growth reported in the latest retail trade statistics is disappointing, it is not surprising. “Retailers are reporting that business has been steady, but not stellar through until the end of June,” said Retail NZ CEO, Mark Johnston.

The latest Statistics NZ Retail Trade survey showed that growth in retail sales to June 30 had slowed to 0.1 per cent on a seasonally-adjusted basis. “We’ve seen good growth in sales in the previous two quarters, but there’s no doubt growth has slowed between April and June. Retailers are telling us that while they’ve been mostly hitting sales targets for the past quarter, they haven’t seen the growth of earlier in the year. There’s a range of reasons for this, including greater economic uncertainty and the particularly bad weather which has impacted sales up and down the country,” said Johnston.

“Retail is a highly competitive business. Kiwi firms are competing not only with each other but also with global e-commerce giants. NZ-based online only stores recorded 7.9 per cent growth over the past quarter, well ahead of total sales growth at 0.1 per cent, which shows that New Zealanders are increasingly turning to the internet and mobile devices to complete their shopping. Spend by New Zealanders on foreign websites is not reported in the Statistics NZ data but is known to be increasing rapidly in terms of value and the number of transactions.

“Despite the challenges, retailers are expecting sales over the next quarter to be steady and for job numbers in the sector to remain stable. It’s not long until the Christmas shopping season begins, and retailers will be hoping that New Zealanders get out shopping well ahead of the big day in December.”

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