New Zealand retailers are feeling more confident as they head into 2024, according to the latest Retail Radar quarterly survey of Retail NZ members.
Retail NZ is the national peak body for retailers in New Zealand.
The improvement in confidence levels comes in spite of economic headwinds and a challenging trading environment, Retail NZ CEO Carolyn Young said.
The quarterly survey found that 71% of respondents for the period to December 31, 2023 shared that they are confident or very confident that their business will survive the next 12 months, with only 12% either not confident or not at all confident of survival.
This is an improvement on the September quarter where only 57% of retailers were confident of their business sustainability.
“The change in Government has been the significant factor in improving confidence for the retail sector,” Young said. “Although the economic outlook is for very strong headwinds for the next 12 months, retailers are expecting to see greater support from the new Government.”
The newfound confidence is also surprising, according to Retail NZ, given that 56% of retailers recorded that they did not achieve their sales targets in the December quarter. In September, 56% of retailers said they were confident of achieving their sales targets for the quarter but only 44% achieved this goal.
The fourth quarter is critical for retailers with key sales periods including the Labour Weekend sales, Black Friday sales and Christmas promotions. Many retailers rely heavily on strong sales during this period to ensure they have a buffer for quieter months.
According to Retail NZ, more than 50% of retailers not meeting targets could spell challenges later this year.
Inflation remains the most significant issue for retailers with 57% expressing concern, followed by wage increases (43%) and freight costs (37%).
“Inflation is the key driver for price increases, with retailers advising that prices were impacted by increases in costs by suppliers, freight costs and wage increases,” Young said.