Minor Improvements In Retail Outlook But Inflationary Pressures Remain

The latest Retail Radar report from Retail NZ shows that inflationary pressures will continue with a further 5 percent increase expected in prices in the next three months, with the influences behind price increases measured for the first time.

“The influences on prices increases are clear with 92 per cent of retailers informing us that that increases by suppliers is the biggest influencing factor. This is closely followed by freight costs at 51 percent, wage increases at 46 per cent and rent increases at 15 per cent. In many circumstances a combination of these influences drove price increases” says Retail NZ Chief Greg Harford.

“These domestic influences have meant that as expected retailers increased prices on average by 6 per cent in quarter three, with 71 per cent of retailers expecting to increase prices on average by 5 per cent in the next three months – signalling that the current inflationary rates in goods and services will continue into 2023.”

“The latest report has shown minor improvements in retail confidence levels and in the number of retailers meeting sales targets, overall winter performance has not been strong. Retailers are more optimistic as they enter the Christmas and summer periods, with 63 per cent expecting to meet or exceed their quarterly targets.”

“However, 30 per cent of retailers are not sure or not confident if their business will survive the next 12 months, only a slight improvement on the previous quarter.”

“The key ‘top of mind’ issues for the retail sector includes wage increases, inflation, supply chains and freight costs.”

The full Retail NZ Retail Radar report is attached.

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