Online shopping up in level 3
New Zealand’s retail sector has continued to struggle under level three, new data from Retail NZ shows.
The latest Retail NZ Sales Index shows sales during April were down 79.8 per cent on the previous year.
A survey of retailers produced by the organisation suggested things are no better under level three than they had been under level four.
Retail NZ chief executive Greg Harford said there had been a significant lift in online sales but the overall figures showed the negative impact of Covid-19.
‘‘Online sales are up 350 per cent under alert level three but overall sales are down by around 80 per cent on average, according to a survey of Retail NZ members,’’ Harford said.
‘‘Sales across the sector have collapsed and, even online trading,
which has been permitted since last Monday is not delivering sales that will allow retailers to recover from the economic carnage of the last few weeks.’’
Before the spread of the coronavirus, online shopping made up 9 per cent of all retail sales.
‘‘While sales are down, on average, by 80 per cent, the fixed costs incurred by retailers continue to build up, and the Covid-19 restrictions will mean that the survival of many retail businesses is on a knife-edge,’’ Harford said.
‘‘The wage subsidy has effectively kept many people employed in retail, but it is likely that we will see a wave of redundancies across the sector when that subsidy runs out.’’
There are 27,000 retail businesses in New Zealand, employing around 219,000 staff, Harford said.
But under level three, stores can only trade online and are required to provide for contactless delivery or click and collect.
Retailers have increasingly voiced concern that tenancy costs for stores they can’t access are crippling chances of recovery.
‘‘Retail creates life in town centres and helps keep communities alive, but it is a low-margin business, with an average net margin of just 3.6 per cent,’’ Harford said.
‘‘The financial impacts of the collapse in sales will last well beyond the lifting of level three restrictions, and the reality is that the retail sector will need substantially greater government support to retain staff and keep operating over the next period.’’
‘‘Overall sales are down by around 80 per cent’’
Greg Harford
Retail NZ CEO