Retailers report slowing sales as inflation and high interest rates bite
Mounting economic pressure is forcing retailers to weigh up their future, with the majority of firms missing their sales targets.
More than a third of retailers are not confident they can survive the next 12 months, Retail NZ said in a new report.
Sales targets were not met by 59 percent of the retailers who contributed data, for the three months ended June, it said. That compared to 44 percent in the previous quarter.
Retail NZ chief executive Greg Harford said the sector had felt the effect of high inflation and high interest rates and consumers had not been spending.
"When they are [spending], they are reprioritising their spending on things like food, petrol and paying the mortgage, so they've got less disposable income," Harford said.
Those selling clothing and other durable goods were feeling the most pain.
At the same time, the cost of doing business had also increased.
"There are big costs coming through from suppliers, which ultimately have to be passed on to consumers," Harford said.
The cost of employing people and the cost of insurance had also increased.
The outlook was not much better, and half of all retailers expected to miss targets again in the third quarter.
"It is really concerning that the retail sector is feeling gloomy about the prospects of the next three to six months," Harford said.
"I [don't think] we're of the woods economically".