According to Retail NZ’s Quarter 2 Retail Radar report, rising operating costs and staff shortages at a time of stagnant foot traffic are growing concerns for New Zealand retailers.
Retailers have experienced a rise in costs of around 6 percent due to inflation, with a similar forecast for the third quarter. Retail NZ chief, Greg Harford, said inflation will have a significant impact and consumers should expect further price increases on products.
“For many retailers, the reality is they are not able to absorb these new costs, instead passing them on to the consumer through price increases.”
About 71 percent of retailers increased their prices by six per cent in the last quarter with 81 percent likely to increase prices in the next quarter. Just over half the retailers hit their targets for the quarter while 46 percent of retailers met or exceeded them.
As high inflation is expected to continue through, Harford says 32 percent of business owners are not confident they will survive the economic pressure.
“Retailers are looking for certainty of foot traffic and stability in the economic environment,” said Harford.