Editorial: Summer may make things brighter

By Dylan Thorne

It's been a rough year for retailers and many are now counting on a good summer and a traditional rush on Christmas sales will help turn things around.

As we reported this week, Statistics New Zealand figures show total retail sales fell slightly by 0.4 per cent between the June and September quarters in the region.

A year-on-year comparison from the Quarterly Retail Trade Survey showed a similar decline of 0.3 per cent, between the September 2012 and 2011 quarters for the region.

While some Bay retailers report an improvement in sales, the figures show overall it hasn't been an easy year for the sector. The region's economy is also still feeling the effects of the Rena disaster and the Psa outbreak.

The rise in online sales has also hurt many local retailers

Nationally, seasonally-adjusted retail sales dipped 0.8 per cent since the June quarter.

This was led by New Zealand's three largest retail industries: Supermarket and grocery sales dipped 1.6 per cent, motor vehicles and parts sales dropped 1.8 per cent and fuel retailing was down 1.9 per cent.

Business NZ chief executive Phil O'Reilly says the decline could have been much worse.

The weak performance of the manufacturing sector combined with the preference for many "mums and dads" to pay off debt at the moment could have caused a much larger downturn, he says.

It's a vicious cycle.

Families, understandably in tough times, close their wallets because they are uncertain about what the future may hold. They may also prefer to reduce their debt levels and consolidate rather than spend money.

While this in many ways is the logical thing to do, it also hurts businesses because there is less demand for products and services.

If spending continues to drop it can also affect the unemployment rate, and businesses shed jobs in a bid to stay profitable in an unfavourable environment.

The good news is that there is hope that things will improve in the Western Bay.

Chamber of Commerce chief executive Max Mason says the tourism and accommodation providers are "reporting good things" which is creating a lot of optimism.

I hope we get a good summer and that the traditional festive season spend-up will give retailers an early Christmas present.

- Bay of Plenty Times

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