March, the month we say cheerio to summer and welcome autumn, and close off the first quarter of 2021. It’s hard to believe that lockdown 1.0 is coming up for its first anniversary, just as we go through lockdown 3.0 (at the time of writing). So much has happened in the past 12 months, but thankfully time does seem to have returned to some form of “normality”.
As mentioned last month retail was pretty buoyant through the Christmas period, we had some record days for spend (as an example Boxing Day recorded a whopping $4.89M in Newmarket). The festive season is always followed by a soft January as the mass summer holiday exodus from Auckland takes place. Although economic indicators are looking more positive than expected – especially unemployment, we are still facing a head wind. We saw a nice bump up at the beginning February, but the most recent lockdown will quickly wipe that away. I expect some businesses who have been kept afloat through various COVID relief packages will be starting to face some challenging realities now and will have some serious decisions to make. I sincerely hope the government continues to support businesses as they have done in the past. Across the country, town centres would really like to see more corporate workers return to their offices in larger numbers at Alert Level 1. Those daily purchases of coffees, sushi and paninis really make a difference to the hospitality sector.
Retail in general has always been a volatile sector, the challenges we first experienced last year saw many businesses step up and flex their resilience muscles. But even the strongest will be feeling some turbulence this year as supply chain issues will start to bite further. I’m upbeat that the issues will be resolved over time, however for some retail lines we are likely to see shortages of stock on the shelves, and delivery times will be stretched out.
As an example some fashion designers are finding certain types of buttons, and fabrics are in very short supply; some homeware products being out of stock globally; or car parts taking months to arrive from Europe or Asia. Manufacturing production in a number of countries is being impacted by rolling lockdowns, there is still a very challenging situation with delays in processing at Ports of Auckland, and lockdowns snarl up the local logistics network. We are one small piece of a global jig-saw, but right now it’s all a bit out of whack. I’m pretty confident we can avoid returning to retail in NZ in the days of old – especially pre-1984. (a selection of 3 TVs in store or jerseys that were itchy… black, dark grey or forest green). Needless to say the range of everything was considerably less than we expect today. Retail and hospitality businesses who have the ongoing cashflow, and agility to work around changing alert levels, stock supply issues, and can differentiate themselves from their competitors – with price, product and/or service are the ones who will be most likely to thrive. But it ain’t easy.
The reality is none of us is likely to be travelling internationally for the medium term. So we just need to keep our confidence up, keep supporting one another, keep up COVID protocols, and most importantly – please keep shopping and eating local.
See you here soon,
CEO, Newmarket Business Association