He said with each lockdown the country faced, the harder it was becoming for trade and performance to bounce back.
"It's been a bit of a rollercoaster ride for the retail sector over the last 12 months, the sector hit the depths of depression back in April and May last year, lifted out of that a little bit, but we've definitely seen dips in confidence whenever there is a lockdown. The more lockdowns go on, and the more lockdowns there are, the harder it is for retailers to recover," Harford told the Herald this morning.
"We did expect to see a dip in confidence on the back of the lockdown in Auckland, but it was more severe than we had perhaps anticipated.
"The feedback that I've been getting from members has been pretty gloomy through the last few weeks. Everyone wants to get the health side of things sorted and no one wants Covid to be running out of control in the community, but locking down stores is a significantly extreme measure that comes at a massive cost for businesses."
While the sector has made a vast improvement on where it was during the height of the pandemic in this country in April and May last year, the toll of more lockdowns was weighing on many businesses, he said.
"If you think back to 12 months ago, the lockdown was a massive shock, everyone was shut down and locked down, that took a toll, a lot of business owners were using their own resources to prop up their businesses at that point, a lot of people took on extra debt and they did that again in August with the further lockdown in Auckland and then again in February, and each time that happened it becomes a little bit harder to recover."
Harford said the performance of the sector over the remainder of the year would be dependent on any further lockdowns. Closed borders and international travel off the cards for Kiwis had been positive for retail spending, he said.
"My sense is the next 12 months are going to be mixed, on average there will probably be some positives in there for the sector, but for some individual businesses it is going to be very tough, particularly if we do see further lockdowns."
Retailers are becoming increasingly concerned by the prospect of new Covid-19 community outbreaks in Auckland, which have knock-on effects for other parts of the country.
"The most recent change in alert Levels (commencing 28 February) is expected to result in a drop in sales for 77 per cent of retailers across New Zealand, and 92 per cent of retailers in Auckland," the report outlined.
"Although retailers are highly adaptable, and most have shifted to new contactless methods of doing business, shopping clearly declines significantly at alert levels 2 and 3."
Retail spending through February was up 9.2 per cent compared to the same month a year earlier, but Retail NZ expects March figures to tell a different story. The retail membership organisation said the strong average sales in February masked the reality that many businesses were "seriously hurting".
Total spending since March 2020 is up an average of 6.7 per cent, according to the report.
Harford said the sector experienced a big drop in spending in the first week of March during lockdown, and he expected to see a bounceback inline with previous trends.
Retail NZ is encouraging government to look at how lockdowns affect the sector, he said.
Continued pressures on the supply chain also weighed on confidence. Stock continues to be delayed due to reduced freight capacity into New Zealand, which is hitting firms in the pocket, the report outlined.
Satisfaction with government falling
Retailers are feeling less satisfied with the Government's handling of the Covid-19 pandemic in recent months, according to the report.
Forty nine per cent of retailers reported feeling unsatisfied or very unsatisfied with its response, an increase from 39 per cent recorded in August.
However, the report said it was unclear whether the growing frustration with Covid and its impacts could be attributed to specific actions taken or not taken by government.
Some retailers said they would have liked to have seen a more localised, suburb-specific lockdown strategy this year rather than an Auckland-wide shutdown, and there was a consensus that the rest of the country outside of Auckland should not have moved up alert levels.
Others said they would have preferred to have seen the initial three-day lockdown extended, which may have prevented or limited the second round of lockdowns a week later.
Card spending tumbles
Stats NZ electronic card spending data shows Kiwis' spending fell in February, with the seasonally adjusted total spending falling 3.2 per cent or by $256m.
The fall was seen across all sectors, but driven by reduced spending on non-retail industries, including postal services and travel agencies, and on consumables.
Kiwis spent $96m (5.9 per cent) less on non-retail industries in the month and $17m less (0.8 per cent) on consumable goods, such as supermarket, specialised food, and liquor sales.
In actual terms, electronic card spending decreased 8.1 per cent by $632m when compared to the same month a year earlier.
Spending in the hospitality sector in the month continued to decline, down 15.8 per cent or by $182m. Spending on accommodation fell 42.6 per cent or $112m.
"The seven days of restrictions from the 14th of February, particularly the three days that Auckland spent in level 3 and the rest of the country in level 2, are likely to have driven lower spending levels in February," said Stats NZ business manager Geraldine Duoba.
"Covid-19 alert level restrictions on movements and activity can impact on the nation's spending patterns," she said.
