Online sales rise in April but retail overall plummets

The financial impacts of the collapse in overall sales will last well beyond the lifting of the COVID-19 Alert Level 3 restrictions, according to Retail NZ.

Greg Harford, Retail NZ chief executive, said online sales may be up in April but overall sales dipped.

Harford added that the retail sector will also need substantially greater Government support to retain staff and keep operating over the next period.

The latest Retail NZ Sales Index showed that sales during April were down 79.8 per cent on the previous year.

Online sales are up 350 per cent under Alert Level 3, but overall sales are down by around 80 per cent on average.

“Sales across the sector have collapsed and, even online trading, which has been permitted since last Monday is not delivering sales that will allow retailers to recover from the economic carnage of the last few weeks,” Harford said.

“While sales are down, on average, by 80 per cent, the fixed costs incurred by retailers continue to build up, and the COVID-19 restrictions will mean that the survival of many retail businesses is on a knife-edge.”

According to Harford, the Wage Subsidy has effectively kept many people employed in retail, but there will likely be a wave of redundancies across the sector when that subsidy runs out.

“There are 27,000 retail businesses in New Zealand which employ around 219,000 New Zealanders,” he said. 

He added retail creates life in town centres and helps keep communities alive, but it is a low-margin business with an average net margin of just 3.6 per cent.

“The financial impacts of the collapse in sales will last well beyond the lifting of Level 3 restrictions, and the reality is that the retail sector will need substantially greater Government support to retain staff and keep operating over the next period,” Harford said.

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