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Summary
- Electronic retail spending witnesses sharp decline in February.
- Retails companies fear not being able to stay afloat for another year in the current conditions.
- COVID-19 restrictions, and lockdowns cited as big reasons for the decline witnessed.
While the pandemic is a year-old, the worst seems to be over in terms of it affecting people’s health. The impacts of it are something that need to be coped with for several years to come, if not more. It was found out recently that retailers had had a difficult time because the spending power of the people wasn’t up to the pre-COVID-19 levels yet. So much so that there are retailers who believe that if things were to go on at the current pace, they will not be able to make it another year.
Image Source: © Terovesalainen | Megapixl.com
According to a recent report, there was NZ$256M less spent by people through electronic transactions in the month of February. This decline was the fifth witnessed in consecutive months, raising major concerns about the future of several retail businesses in the country in the upcoming months.
Geraldine Duoba, the business statistics manager for Stats NZ, was of the view that the three days in February when Auckland was having a Level 3 alert and the rest of the country a Level 2 could have been the reason for about 3.2% decline in the total purchasing in the month. The restrictions placed on movement as well as activities in the country have been major factors in shaping the spending patterns in these times.
It was further said that while the seasonally adjusted earnings had witnessed a fall in all sectors, two sectors were specifically affected. Non-retail industries such as travel and postal saw a 5.9% decline, whereas consumable goods, including liquor, and supermarkets etc., witnessed a decline of 0.8%. As compared to February in 2020, the retail sales through electronic cards have witnessed a total of 8.1% or NZ$632M. While the hospitality sector overall witnessed a decline of NZ$182M, the accommodation segment alone suffered NZ$112M.
The hospitality industry has to be one of the worst hits, with border closer and travel restrictions, considering that a major chunk of the country’s economy was dependant on tourism. With the retail market comparatively steady and the vaccines being currently administered in various parts of the country, it is expected that things fall back in line slowly in the months to come.
The retailers are currently under a lot of stress due to the reduced freight capacities of the country due to restrictions, which means low supply and higher prices.
