Overview of the New Zealand retail sector

Release date
01/06/2005
Reference
Vol. 68. No. 2. June 2005
Author
Hannah Kite
Main file
This article provides an overview of the retail sector over the past five years. Strong sales growth across all store types has been a key feature of the retail sector over the period. The scale of the retail sector has also been expanding, with a significant increase in the number of new stores, and a tendency toward larger store sizes as operators seek competitive advantages of increased buying power and other scale economies. Low price inflation, particularly for stores that sell imported goods, has been another feature of the retail sector; low or negative inflation in the sector has been driven by the rising New Zealand dollar, and a fall in world prices for manufactured consumption goods. Productivity growth within the retail sector appears to have been lower than in other parts of the economy, but may be increasing over time. Profit margins within the sector have lifted slightly over this period but appear to have been constrained by strong competition and further increases in capacity within the sector.