Consumer Confidence Result Shows Continued Retail Softness

New research showing that the environment for retailers is ‘likely to remain patchy and challenging for some time yet’ comes as no surprise, Retail NZ says.

The latest ANZ-Roy Morgan NZ Consumer Confidence Index shows that consumer confidence fell 4 points to 96.0 in January. There was a big 15 point drop to -16 in the proportion of households thinking it is a good time to buy a major household item.

However, a net 23% of consumers expect to be better off this time next year.

Retail NZ Chief Executive Carolyn Young says that the results reflect the realities that retailers are dealing with.

“While retailers saw some benefit from the customary Christmas rush and the Boxing Day sales, consumers are continuing to be careful with their spending. Attitudes to buying major household items rose sharply in December and the latest figure signals a return to previous levels. This may be cyclical, due to the sales and great deals that were available around Christmas and Boxing Day.”

Pricing and cost pressures will continue to be major challenges for retailers this year. The sector is looking forward to seeing a lift in consumer spending as the impact of the fall in interest rates kicks in, as well as benefits from the Government’s new focus on economic growth, she says.

The ANZ Business Outlook for January, released yesterday, found that the retail sector was one of the most positive sectors about expected performance over the next 12 months.

“Retailers can see that things are set to improve and the sooner that happens, the better.”

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