- FY18 retail growth was strong at 3.8%, outpacing the broader economy for the fourth year in a row, with GDP growing 2.7%. However, the rate of growth has declined for the last four years, as has GDP.
- Retail growth in FY18 was spread across the country, rather than being concentrated in Auckland, although Wellington and Canterbury continue to underperform the average.
- Stalling/falling house prices in Auckland and Canterbury appear to have slowed the significant historical growth rate in the hardware, building and garden supplies, and furniture, floor coverings, houseware and textiles sectors, despite residential building consents continuing at record levels.
- Tourism has continued to fuel growth in the accommodation and food and beverage services sectors, albeit domestic malaise appears to have curtailed historically high growth.
- The apparel sector has continued to recover, driven by clothing, while footwear retailers failed to see growth.
- FY18 saw fewer retail failures (Topshop, Andrea Moore, Meccano, The Native Plant Nursery), following some tough years for the sector. The outlook however appears mixed, with continued forecast GDP growth, but falling consumer confidence, perhaps linked to concerns of a property market downturn (now underway in Australia), unclear Government policy direction and potential global geopolitical instability. In addition, the Government’s plan to raise the minimum wage will increase retailer costs, perhaps offset by upside from GST reforms on low-value imports proposed to be implemented in October 2019.