Get ready for a potentially less-than-jolly holiday season! A recent survey reveals that a significant majority of retailers are hesitant to bring on extra hands for the crucial Christmas and New Year period. This news, while perhaps not surprising given the current economic climate, could mean longer lines, less attentive service, and an overall less festive shopping experience.
Retail NZ, a leading voice for the retail industry, conducted its "Retail Radar" survey between July and September, gathering insights from approximately 350 businesses. The findings paint a picture of cautious optimism tempered by economic realities. Carolyn Young, Chief Executive of Retail NZ, explained to RNZ that the survey results reflect the ongoing pressures faced by retailers, including squeezed profit margins, anxieties surrounding the rising cost of living, and a general lack of consumer confidence. In essence, retailers are carefully scrutinizing their bottom lines, trying to figure out how to maximize efficiency and cut costs wherever possible.
"The reality for retailers right now is they're looking at their margins, they're looking at the stock they've got to move and they're thinking, 'Where can I trim costs or look to be more effective?'" Young stated, highlighting the difficult decisions many retailers are grappling with.
Specifically, the survey revealed that a mere 2% of retailers anticipate hiring significantly more staff than usual. Meanwhile, 12% indicated they would hire some extra help, but fewer than they did the previous year. Roughly 22% plan to maintain staffing levels similar to what they had in 2024. So, the vast majority—over 60%—are choosing to stick with their current workforce. But here's where it gets controversial... does this mean retailers are prioritizing profits over customer experience during the busiest shopping season of the year? Or are they simply responding responsibly to a challenging economic environment?
Despite the staffing concerns, there's a surprising undercurrent of optimism within the retail sector. Two-thirds of retailers expressed confidence or strong confidence in the future, a slight increase from the 65% reported during the same quarter last year. This resilience is further supported by data from the previous Retail Radar survey (April to June), which showed that 69% of retailers were confident their businesses would survive the next 12 months, a significant jump from the 57% recorded in the same period last year. And this is the part most people miss... it's crucial to remember that this time of year accounts for a huge chunk of retailers' annual profits.
"Retailers generally are optimistic, right?" Young affirmed. "This quarter is the most important quarter in retail - it's where two thirds of profits for most businesses in retail are made, so you have to be optimistic that that new stock that you've got coming in, and the stock you've got for Christmas for gifts and things is going to sell, because otherwise, you know, you can't be in the game."
However, this optimism is often tempered by practical considerations. As Young pointed out, many retailers have recently undergone restructuring or staff reductions, leading them to adopt a more cautious approach to hiring. "The reality shows, when they're looking to hire more staff, they're saying, 'We're going to hold off on doing anything like that right now, because we've just done a restructure or just let some staff go, so we just have to kind of tighten our belts and see our way through'."
So, what does all of this mean for you, the consumer? Will you notice a difference in service levels this holiday season? Will longer wait times and potentially overwhelmed staff impact your shopping experience? And perhaps most importantly, do you think retailers are justified in their staffing decisions, given the current economic challenges? Or should they prioritize hiring extra staff to ensure a smoother and more enjoyable shopping experience for everyone? Share your thoughts in the comments below!
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