Mahurangi shopkeepers must focus on service says Retail NZ

Retail New Zealand chief executive Greg Hardford says Mahurangi retailers need to focus on customer service to sway shoppers away from large malls like Albany.

“Successful retailers in smaller centres will be those that can differentiate themselves and offer local convenience, unique products, a great environment, added-value services and outstanding customer service,” he says.

“Customers are often prepared to drive quite long distances for their shopping experience. This poses a particular challenge for small town retailers in places like Warkworth and Wellsford.”

On a more positive note, Retail New Zealand released its latest retail spending report at the end of last year, revealing Kiwis continue to spend up large.

New Zealanders spent a total of $96.8 billion on retail goods from June 2018 to June 2019.

They spent an average of 43 per cent of their gross annual income on retail goods – about $22,273, which is a few hundred up on last year.

In the last decade, hardware and garden supplies have seen the most spending growth at 79 per cent.

Food and beverage grew 70 per cent, furniture and houseware grew 51 per cent, electronic goods grew 46 per cent, while pharmacies grew 43 per cent.

In terms of profit margins on goods, the average net margin across the retail sector remained low, at 3.6 per cent – down from 3.7 per cent in the previous year.

Margins are the highest in recreational sport goods at 5.9 per cent, then hardware at 5.2 per cent and clothing at 4.4 per cent. Electronic goods have the lowest margin at 3.4 per cent.

Small retailers lamenting the online shopping trend may take comfort in the fact that online spending still only accounted for 9 per cent of retail spend at $4.2 billion. However, online spending grew by 19 per cent on the previous year.

By far the bulk of businesses in New Zealand are small businesses, with 24,750 businesses having less than 10 employees, out of 27,762 total businesses (89 per cent).

Since 2014, 855 new retail stores have opened, including 210 grocery stores, 165 furniture stores and 159 specialised food stores.

However, there are 21 fewer hardware stores, 57 fewer electronic goods stores and 390 fewer clothing stores.