Retail sentiment has shifted as a global fuel crisis has impacted business confidence, according to Retail NZ’s latest quarterly survey.

The Retail Radar report found the market had been supported by sales and consumer confidence at the end of last year and the start of this year. Recent developments in the Middle East have led to a change in sentiment.

Retail NZ CEO Carolyn Young said more than half of businesses met or exceeded targets from January to March, while 33 per cent expect to do so in the next quarter. About 66 per cent do not expect to meet sales targets in the June quarter.

“We haven’t seen this level of pessimism in almost two years, despite the sector practically running on empty since the Covid-19 pandemic with very little in the way of a financial buffer,” she said.

Cost pressures remain. Freight costs are a concern for 79 per cent of businesses, while inflation and cost of living are the main concerns at 85 per cent. Higher fuel prices are increasing pressure across supply, foot traffic, consumer confidence and the wider economy, with at least 70 per cent of respondents identifying these as concerns.

The medium-term outlook remains uncertain. Some 61 per cent of businesses are confident they can continue operating over the next year, while 29 per cent are ‘really not sure – could go either way’.

Retailers are calling for government support, including measures to encourage office attendance, support freight companies with fuel costs, and encourage shoppers to buy local.