Retail News

Tuesday 2 March - Employee Probation period could rise
The Government has floated a proposal to increase the 90-day probation period for employees in small firms as part of a planned revamp of personal grievance rules. Read on...

Thursday 25 February - Financial Reporting
The Commerce Minister today announced that non-issuer companies would not be required to file financial statements with the Registrar of Companies.  The Association welcomes this announcement, which is line with the recommendations in our submissions to the Ministry of Economic Development's Framework for Statutory Financial Reporting. 

Additional compliance burden aside, the rights to privacy and commercial confidentiality were fundamentally at risk had the proposals proceeded.  Today's announcement provides us with confidence that commonsense continues to prevail. 

Monday 22 February - Employment Grievances Law Review
The Government announced that it shares concerns from many quarters about the fairness and consistency of personal grievance decisions and will shortly be releasing a discussion document on ways to improve their fairness and certainty and, if necessary, will introduce amending legislation.  Currently the grievance process is unreasonably process driven, and If the process is flawed so, generally, is the dismissal no matter how justified.  It’s the old form over substance chestnut that the New Zealand Retailers Association welcome the opportunity to crack.

Friday 12 February - December Sales Results
Statistics New Zealand recently released their retail series for the December month and the December quarter.

Let’s consider the month first – the Christmas trading period. We were all aware that Christmas shopping was true to form and came with a rush over the last 10 days or so. However, the rush wasn’t strong enough to give us the growth we were looking for as an industry sector. We had been hoping to get to around 3.5% compared with December last year but we only managed 2.3%. In fact, the core retailing group (excluding the vehicle related categories) only gave us growth of 1.7%. When the December growth was viewed on a category basis there was some indication that the lack of turnover growth may have been partially reflective of intense competition, lower prices and that the volume of sales may have performed better. On a regional basis Wellington and Canterbury were the poor performers.

When we look at the quarterly data the December quarter was up 1.6% overall and the core retail group was up by 2.4%. There was mixed performance by sector with supermarkets/grocery stores, recreational goods, liquor and appliance stores doing better than average and department stores, furniture and floor coverings and footwear all down. While takeaway food was up, accommodation, bars and clubs were down. Cafes and restaurants were the star performers at 7.8% growth on the December quarter last year. Wellington was the region under the greatest pressure recording a 4.9% decrease compared with last year.

One pleasing aspect of the numbers was that the sector appeared to have stock under better management with most store types showing a decrease in stock at the end of December last year compared with the end of the previous year.

GST – The Proposed Move To 15%
In Prime Minister John Key’s opening speech to Parliament he indicated that one of the possible tax revisions being considered was to increase the GST rate from 12.5% to 15%. This would be supported by other appropriate tax reductions and benefits to ensure that nobody would be worse off, but the focus for taxation would shift from earnings to consumption.

This sounds pretty simple. Or is it? What do retailers need to think about?

1) Past experience has clearly demonstrated that in the month leading up to the GST increase, retail sales go mad and in the month after, sales go down. Retailers need to recognise this when ordering from suppliers.

2) Changing all of the shelf prices in a large store is not a five minute exercise – as the rate will be 12.5% one day and 15% the next. This exercise needs to be completed overnight.

3) Pricing needs to be considered – a $49.95 price point increases to $51.06. This is not a sensible price point. What will each retailer do about their pricing? Will this be inflationary?

4) How much lead time will we get or need? Consider the chains that get their product price tagged at the manufacturing source, when do we need to know what is happening to ensure that these products only need to be priced once?

5) It’s not only shelf prices that will need to be changed – what about printed brochures, websites, signage, etc?

6) An increase in GST makes the local retailer even less competitive against the off shore e-retail site. At 15% we need to be thinking of ways that all personal imports can be subjected to GST so we have a level playing field.

7) What about our tourists? Many countries (e.g. Australia, Singapore, Canada, UK) have a GST/VAT refund scheme for tourists taking significant goods out of the country. Unless we adopt this practice we will see even more of the tourist dollar going elsewhere.

8) There has already been talk of exemptions – leaving aside the level of GST for a moment it is fair to say that the system of no exemptions that we have works really well. We do not want the complexity of an exemption regime.

So we have plenty to think about. The Association will be making representations to Government to ensure that any change in the rate of GST considers all of the points above and results in minimal disruption for the retail sector. After all we are the Government’s tax collectors.

If you have any thoughts on these issues please let us know. We hope to have our first draft completed in the next couple of weeks so we need your input now. Please don’t delay in responding, contact Louise Evans levans@retail.org.nz.

27 January 2010 - Minimum wage announcement - Minister of Labour Kate Wilkinson today announced an increase in the Minimum Wage from $12.50 to $12.75 effective 1 April 2010.  Click here to read more. The Association submitted to retain the rate at its current level. You can read our submissions NZRA Submission on Minimum Wage Review 2009.

12 January 2010 - Warning about PIN scam pair
Three Wellington retailers have been hit in a credit card Pin scam. Read on...

Credit Card Interchange Fees - a new competitive landscape.                      
The settlements between the Commerce Commission and Visa, MasterCard and, as announced today, separate settlements with seven Finance Institutions, are a significant development for the retail industry.  Read the Commerce Commission's press release. The Association has in the past managed to secure on behalf of its membership, preferential rates for acquiring, and we are excited at the opportunities now open to us as a result of the settlements.  We will kee