With Monday’s Retail Trade Survey posting a strong but patchy result (Note: Infometrics clients can get our view on it here), it is a good time to ask – what does the future hold in the retail sector. Gareth Kiernan recently had a peek into this issue and wrote up his thoughts for retail news (Infometrics link):
Overcapacity in the retail sector following the boom years up until 2007 meant there were not enough customers to go around once the economy hit the wall. The increasing prevalence of online shopping, particularly with overseas-based retailers given the high exchange rate, further eroded the market share of local firms. According to the NZIER’s Quarterly Survey of Business Opinion (QSBO), the profitability of merchants at the end of 2008 was squeezed harder than at any time since 1983.
The good news is that 2014 could be the best year for retailers for some time.