Carolyn Young, chief executive of Retail NZ. Photo: Supplied
There are signs the worst of the economic downturn may be over for New Zealand retailers, but the outlook remains far from optimistic.
Retail NZ said latest Stats NZ data indicate a small uptick in consumer spending, but the bigger picture remained bleak, pointing to the recent closures of large retail chains, Smiths City and Kitchen Things, as well as smaller well-established shops in many centres.
A retail sector report by brokerage Forsyth Barr expects three-out-of-four of listed retail companies, which included The Warehouse Group, Briscoe Group and Hallensteins Glassons, to underperform while the fourth, KMD Brands, was restructuring including 21 store closures.
The report says the outlook for the sector was more positive across the Tasman.
"Australian retailers that reported (financial results) in August indicated that the consumer backdrop has improved sequentially throughout 2025 in New Zealand," the Forsyth Barr report says.
Still, Retail NZ chief executive Carolyn Young said the majority of New Zealand retailers were far from optimistic with two un-named large retailers preparing to lay off staff and cut costs.
"We know through our advice line that we've had a lot of calls about restructures, stores closing, a lot of HR issues in terms of managing performance, and all of those things point us to the fact that businesses are still struggling," Young said.
"I know one of the big retailers... they're closing 16 stores. I know another retailer that's closing a whole brand."
She said the big players were under the pump with orders to minimise expenditure and maximise sales, while trying to manage large increases in operating expenses, such as insurance, utilities and freight.
She said small increases in card spending made little difference given the rising price of consumer items, particularly in grocery and hospitality.
While retailers still in business were beginning to see an increase in customer numbers, Young said that was a direct result of the closure of nearby competing stores.
"So green shoots are coming at the demise of other people. So the overall sector is not growing, or we haven't seen it grow as of yet.
"The big retailers, the medium retailers and small retailers are all fishing in the same pond, and they are all trying to find ways to control margin and profitability and retain staff."
Young said time will tell whether the sector had seen the bottom of the cycle, with November and December's peak spending yet to come.
