Sales sluggish in Q2: Retail NZ

More than half of retailers failed to meet their sales targets in the second quarter of 2019, according to the latest Retail Radar report from Retail NZ.

This was up from 55 per cent of retailers who failed to meet their targets in the previous quarter.

The report from New Zealand’s industry body cited rising business uncertainty, periods of extreme weather and a lack of consumer desire to spend as the key reasons for sluggish sales over the three months to June 30.

“For some retailers, the prolonged autumn weather and an easy transition to winter saw positive results, and the Government’s decision not to proceed with a Capital Gains Tax was also seen as positive,” Retail NZ stated in the report.

“However, across the sector many are continuing to point to business and economic uncertainty. For the second quarter in a row, this uncertainty
is the largest issue that negatively impacted retailers, indicating that consumer unwillingness to spend is continuing on.”

The increase in minimum wage to $17.70 an hour (up from $16.50 last quarter) was also said to have had a negative impact on business.

These factors are also shaping retailers’ views about the future. While 57 per cent of retailers said they expect to meet or exceed sales targets for the third quarter in 2019, a growing share of retailers do not expect to meet their targets.

Forty-three per cent of retailers said they will fail to meet sales targets this quarter, up from 36 per cent in Q1 of 2019.


The percentage of retailers planning to employ fewer staff over the next quarter is down slightly from 30 per cent in Q1, to 27 per cent in Q2. Despite the increase in minimum wage, 64 per cent of retailers expect to maintain staff levels.

Instead, they may be counteracting rising operational costs by lifting prices. Thirty-two per cent of retailers said they lifted at least some of their prices in Q2. Looking ahead, 37 per cent expect to lift prices in Q3, down slightly from 40 per cent last quarter.

Retail NZ’s Customer Radar report showed that consumers were the most satisfied with their shopping experiences on a Wednesday and least satisfied on a Sunday during Q2.

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