Most New Zealand retailers failed to reach sales targets in the typically busy Christmas peak season, according to research from Retail NZ. 

In the industry body’s quarterly Retail Radar report, CEO Greg Harford said the festive season had delivered mixed results for retailers last year, with inflationary pressure continuing and price increases outside their control. 

“The softened consumer demand during the typically peak season for retailers has unfortunately hit home over Christmas,” said Harford. “While 63 per cent of retailers had expected to hit their sales targets for the quarter, only 34 per cent managed to achieve this.” 

“The soft performance during the busy period has led to a pessimistic outlook for the sector going forward.”

He said one in two retailers do not expect to meet sales targets during the next three months, and 30 per cent are not confident their business will make it through the year. 

“This demonstrates the seriousness of the challenges faced by the sector,” said Harford.

“Additionally, price increases are likely to continue, with retailers impacted by external factors pushing up prices.”

Of the retailers surveyed, 92 per cent said supplier price increases were the biggest factor, whilst freight and wage increases are also impacting them. 

“On average, Retail NZ members reported that prices rose by around 7.7 per cent during the last quarter and forecast an additional 7.1 per cent increase in the first quarter of this year. While retail prices are only one factor in the official Consumer Price Index, this does show that there are still significant headwinds facing the economy.”

Harford said inflation will continue to be a critical ‘top of mind’ issue impacting retail operations in the months ahead, along with supply-chain pressures and employee shortages.

The Retail Radar findings coincided with the release of card spending data from Stats NZ showing a considerable decline after taking into account seasonal fluctuations.