Nine out of 10 New Zealand retailers expect prices to rise during the next three months as pressure grows from growing wage costs and supply-chain disruption.
According to new research from Retail NZ, 58 per cent of retailers said they have increased prices – up by 1 per cent on the preceding quarter.
“Price pressure remains almost identical to what we witnessed in Q4 of last year,” the Retail Radar report concluded.
“Looking forward to next quarter, 90 per cent of retailers are expecting prices to rise, by 7.5 per cent on average.”
An increase in the minimum wage took effect on April 1 and June will see the introduction of the new Matariki public holiday.
“Those and the recent doubling of sick leave entitlement has left retailers to face a barrage of new costs,” said the report.
“On-going domestic and global supply chain issues associated with Covid-19 continue to add to this pressure. The unfortunate reality is many retailers are unable to absorb these costs and instead, they will be reflected in corresponding price increases.”
The report concluded that the widespread emergence of Omicron in the community has seen retailers miss targets and a steady 65 per cent of retailers are dissatisfied with the government’s response to Covid-19.
“As expected the Omicron outbreak and impact of the Red Alert Level Setting has had widespread impacts on the retail sector – in particular central city retailers – and has seen low foot traffic across the country,” said Retail NZ CEO Greg Harford, commenting on the report.
“The Retail Radar Survey shows that 75 per cent of retailers did not meet their targets in the past three months. Furthermore, 61 per cent are not expecting to reach targets for the next quarter reflecting the overall impacts of the current operating environment.”
Harford said retailers were looking for a clear signal from government that it is safe to reengage with communities, businesses and workplaces as the sector tries to rebuild and recover from the Covid pandemic.
“We must move forward, and we are calling on the government to speed up the review of Alert Levels.”
