Retailers hoping sun will boost sales

Friday, 1 December 2017

Heavy sales during the dry winter period did little to help sales.

Retailers are hoping hot summer weather will give shoppers a boost after after poor winter sales.

Nearly 60 per cent of retailers failed to hit their sales targets in the September quarter, according to a Retail New Zealand survey.

Retail New Zealand general manager Greg Hardford says 75 per cent of retailers expect to meet sales targets by the end of the year, but this is down from 92 per cent on last year.

The latest Statistics New Zealand retail survey found sales volumes climbed 0.2 per cent in the three months to September 30 compared to the previous quarter, while sales values climbed by just 0.1 per cent.

But Retail New Zealand general manager Greg Harford said 75 per cent of retailers expected to meet or exceed their sales targets by the end of the year.

Sunny weather is expected to boost sales in the lead up to Christmas.

Managing director of First Retail Chris Wilkinson says retailers are likely to continue the traditional of large sales in the week before Christmas.

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'Although this is down from 92 per cent at the same time last year, reflecting the negative retail trading environment during 2017.

'All the data suggests that consumer spending has been increasingly constrained during the first nine months of the year.'

On an annual basis, sales volumes growth fell to 4.1 per cent, the lowest since early 2014.

Much of the fall was down to the unusual strength in sales in the June quarter. In dollar terms, food and beverage saw the biggest fall of the 15 sub-categories, with sales dropping by more than $75 million, while accommodation dropped by around $40m.

Harford would not say if this meant retailers would relax sales in the lead up to Christmas in the hope sunny weather would draw in shoppers.

First Retail managing director Chris Wilkinson said the greater consistency, warmth and sunshine had boosted retail sales in the past few weeks.

'This particularly applies to home improvement and garden centres, outdoor stores and supermarkets as shoppers spend up on food and beverages for the hot weather and light evenings.'

Sales for the major chains would likely mirror recent years with increased promotional activity in the lead up to Christmas, he said.

'While retailers would love to shift from the trend that has seen discounting ahead of Christmas, the fact competitors go into sale usually prompts a response, otherwise they risk losing sales and goodwill,' Wilkinson said.

Online shopping sales were also having a down-stream effect on local promotions, he said, which created expectations of low prices from shoppers.

'We're seeing retailers responding to the online traders with similar deals. That's something we're likely to see more of the mega-online traders target New Zealand.'