New Zealand’s retail sector is gearing up for a strong pre-Christmas sales season after a significant cut in the official cash rate (OCR) on Wednesday. The hope is that this cut will boost consumer confidence during one of the busiest shopping weeks of the year.
The Retail NZ association recently conducted a survey that revealed 70 per cent of retailers did not meet their sales targets in the July-September quarter. This downturn in sales has been tough for the industry, but with inflation returning to the target band and the OCR reduced to 4.25 per cent, the lowest since November 2022, there is optimism for a successful Christmas trading period.
Stats NZ’s latest Retail Trade Survey reported a 1.7 per cent decrease in core retail sales compared to the same quarter in 2023. Total retail sales, including motor vehicles, parts, and fuel, were down by 2.8 per cent. Retail NZ Chief Executive Carolyn Young emphasized the importance of strong pre-Christmas sales for retailers to meet their annual targets.
While the current economic activity in New Zealand remains subdued, the RBNZ Monetary Policy Committee predicts a recovery in economic growth in 2025. Lower interest rates are expected to encourage investment and spending, which could help boost the retail sector.
As retailers prepare for the holiday shopping season, the focus is on attracting customers and meeting sales goals. With the recent OCR cut and hopes for improved consumer confidence, the industry is optimistic about a successful pre-Christmas sales period.
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