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Retail stocks continued to tumble today following Briscoe Group's April quarter report that showed same store sales slumped 10 per cent.
Briscoe managing director Rod Duke warned first half profit would about halve from last year and that other companies would be similarly hit.
Shoppers were keeping their
cards in their wallets in response to rising interest rates and food and petrol prices.
The retail sector got more bad news today when Statistics New Zealand data showed the economy shed 29,000 jobs in the March quarter - a number described by Westpac economist Brendan O'Donovan as "an absolute shocker".
Job figures are normally a lagging economic indicator and today's figure suggested the economy is in a much more steep dive than had previously been thought.
The New Zealand dollar plunged over one US cent to US77.19c, which will do no favours for the retailers that mostly import their stock.
The money market reacted by cutting short term interest rates nearly a quarter of a percentage point.
Shares in Briscoe fell 9 per cent yesterday and today were down another 6 per cent, 7c to a record low of $1.05.
Among other retailers hit Postie Plus fell 3 cents, or 6 per cent, to 46 cents, Smith's City fell 2 cents, or 4 per cent, to 46 cents, Michael Hill International fell 3 cents, 3 per cent, to 87 cents and Pumpkin Patch, which fell 9 cents yesterday, lost another 3 cents to $1.71.
Hallenstein Glasson, which lost 5c yesterday, was down another 2 cents today to $3.53 while retail heavyweight The Warehouse, which lost 12c yesterday, fell another 4 cents to $5.60.
Economists said the Reserve Bank would face heavy pressure to bring forward its easing cycle, previously expected to begin at year end, with some calling on the bank to start cutting rates as early as June.
Goldman Sachs JBWere economist Shaumubeel Eaqub said the jobs survey added weight to his firm's view "the economy is slowing very sharply, and the downside risks are far more palpable than the Reserve Bank is giving credit for.
"We continue to believe interest rates need to be cut and we think between June and September is still a very good call."
Upscale Wellington department store Kirkcaldie and Stains yesterday reported a moderately strong first half but acknowledged the next half would be a challenge.
The listed department store posted a 12.8 per cent increase in first half net profit to $829,000 for the six months to February, with revenue up 2 per cent.
Managing director John Milford said that was partly due to a strong fashion season, boosted by the long, hot summer, which meant fewer mark-downs later on.
But he was concerned about the six months ahead, and also worried that the string of economic bad news would become a self-fulfilling prophecy for consumer confidence.
Forsyth Barr analyst Guy Hallwright said Mr Duke may well be right in predicting a soft first quarter this year, but said it was difficult to say what would happen beyond that.
The potential for tax or interest rates cuts could make a difference but "you wouldn't be too optimistic".
He thought Briscoe Group might be the hardest hit of all the listed retailers, because it was affected by both seasonality and was highly leveraged operationally.
Warm temperatures into May had made it difficult to shift goods like heaters, winter clothing and sports gear but the cold snap at the start of this month may have improved the situation.
- NZPA