The New Zealand retail sector has been outperforming Australia over the past few years despite the challenges it is facing, a new report by Retail NZ showed.

Greg Harford, Retail NZ’s general manager of public affairs, said retail in New Zealand can often seem pretty gloomy for Kiwi businesses which have flat or declining sales, but on average since 2013 New Zealand’s retail sales have grown at a faster rate than Australia’s and on a state by state basis, the country has outperformed every Australian state and territory except New South Wales during the period.

“This reflects the relative strength of the New Zealand economy, and the challenges that have faced Australia over that time,” Harford said.

“The Dynamic Retail 2018 report shows that retail spending has grown steadily since the Global Financial Crisis in 2009 and is currently $92.3 billion – that’s $18,953 (plus GST) for every person in New Zealand,” he said.

“On a per capita and inflation-adjusted basis, this is well above spending back in 2000.”

According to Harford, on average, every New Zealander spends just under $22,000 a year in retail, including just over $2,800 in GST which is paid to the government. Average net margins across the sector is relatively low, at 3.7 per cent, but there is a variance across the sector, with the clothing, footwear and personal accessories categories performing best at 7.5 per cent.

“Overall the New Zealand retail sector is well positioned for the future but it is important that the sector continues to evolve to meet changing customer demand,” Harford said.

He said a move to larger stores is seen over the next 10 years, but also a strong niche small retail environment; a continued move to digital channels; and a move towards vertical integration.

“Competitive pressure will mean that retailers need to innovate and be highly responsive to customer demand.”