2010 Toughest Winter For Retail In Years

2010 Proving To Be Toughest Winter For Retail In Years

Uncertain super city election not helping

This winter is probably tougher than even last winter for most New Zealand retailers and arguably the toughest in almost 20 years, claims the head of the country’s top retailing district.

“Last winter was tough because the country was technically in a recession and people’s confidence was shot. However this winter is probably worse because consumers have literally got less money to spend and overall confidence remains flat,” says Cameron Brewer, chief executive of the Newmarket Business Association.

“This is lining up to be a real winter of discontent and we probably haven’t had one of those since the early 1990s when unemployment hit double figures. This time we haven’t seen big unemployment but what we have got is an erosion of people’s spending power and confidence.

“Inflation is hurting retail with fixed costs such as food, electricity, petrol and car registrations all digging into household budgets, meaning less money for people to spend on more discretionary items.

“What’s more in Auckland, there is growing uncertainty over the region’s future with the biggest local body election and municipal merger in Auckland’s history hanging over 1.4 million heads. While it’s probably not directly affecting business, it nonetheless creates an air of uncertainty like a general election does, particularly when you consider nearly 8,000 local government jobs are at stake. The sooner the ‘super city’ is nailed down, the better it will be for everyone.

“Statistics New Zealand’s April retail figures were not good, but sadly the retail numbers this winter will probably prove to be worse.

“This is my six winter in Newmarket and I think its proving to be the toughest in recent memory for retailers across the country. You’ve got to remember that last winter a lot of banks were still giving their loyal business customers a bit of leeway. This winter banks are adopting a much more sink or swim approach and for some retailers that’s proving to be very challenging.

“What’s more, despite customer numbers being down on every New Zealand street, many landlords are still not coming to the party and offering retailers some form of rent relief. So it’s proving to be a very difficult time for retailers to make ends meet.”

Cameron Brewer believes the first rays of retail sunshine will come in the fourth quarter of this year, with across-the-board personal tax cuts, a healthy payout for dairy farmers, and certainty for Auckland’s future all helping to lift people’s confidence and spending.

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