Retailers are optimistic that improvements will come in the next quarter, after failing to reach sales targets during the three months to September 30 due to inflation and increasing wage costs.
A Retail NZ survey showed that 61 per cent of its member retailers did not meet sales targets during the third quarter, with 56 per cent expecting to meet or exceed the targets as the country heads to a busy Christmas and summer season.
However, only 57 per cent said they are confident or are very confident that their business would survive the next 12 months. This signifies a fall in confidence levels for the third consecutive quarter.
“Our survey of retailers showed that they were in a holding pattern during the third quarter, with issues such as inflation, increasing wage, freight and lease or rent costs continuing to impact many. The political environment with the recent General Election also created uncertainty for many retailers,” said Retail NZ.
Around 59 per cent of the retailers said they increased their product prices, driven by higher prices from suppliers. The research noted a 3.4 per cent average price increase across the board during the quarter.
Meanwhile, the research noted that retailers might need to focus on staffing, inventory management, and overall store operations to provide customers with an enjoyable experience during the Christmas season.
It also said that retailers should continue prioritising training as a significant number of customers mentioned staff friendliness as a highlight of their shopping experience.
“The fourth quarter is always critical for retailers with three key sales markers with Labour Weekend sales, Black Friday sales and the Christmas promotions. Many retailers rely heavily on strong sales during this period to ensure they have a buffer for quieter months during the year,” the lobby group said.