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The Retail Market in New Zealand An Analysis 2013 promoting e excellence xcellence in retailing

The Retail Market in New Zealand An Analysis

2013

promoting eexcellencexcellence in retailing

2013 promoting e excellence xcellence in retailing Prepared by John Albertson, CEO New Zealand Retailers
2013 promoting e excellence xcellence in retailing Prepared by John Albertson, CEO New Zealand Retailers

Prepared by John Albertson, CEO New Zealand Retailers Association May, 2013

The Retail Market in New Zealand - An Analysis

Introduction

We believe information is the new currency.

The environment around us, competition in the market place, consumer shopping/buying behaviours, overseas trends and developments all impact on retail success or failure.

In these rather difficult times retailers have to maximise their sales. A better understanding of the market place will, hopefully, lead to more informed decision making and consequently a better share of the consumers’ available dollars. Today we have the added complexity of a generation or two who will drive the development of a whole new channel – the online channel. Does my business need to be there? How do I integrate my physical presence and my online presence to give the consumer a seamless experience with my brand?

Over recent years the New Zealand Retailers Association has reviewed available information sources and has brought this information together to paint a picture of the environment we operate in.

This report replaces that issued in April 2012.

We have added some more information on population as this is one of the key drivers of retail development. We have also introduced a section on the tourism market as this is an expanding sector and retail is one of the biggest recipients of the tourist dollar.

We realise the importance of the online space and are waiting on some new information on this area. Once that information is available we will issue a supplementary report.

Much of the analysis in this report considers the ‘big picture’ only. More detailed analysis is available. We would be happy to advise on this.

Most data in this report is sourced from Statistics New Zealand. (Visit www.stats.govt.nz.)

The Retail Market in New Zealand - An Analysis

Sources Of Information:

A. Statistics New Zealand

Business Demographic Survey

Retail Sales Series

Annual Enterprise Survey

2006 Census and subsequent SNZ estimates.

Household Economic Survey

Tourism Satellite Account

B. BusinessNZ

Economic Background

C. Deloitte/National Retail Federation

The Retail Market in New Zealand - An Analysis

Table of Contents

Page

Section 1 – The New Zealand Economy

4

1.1

Key Economic Indicators

4

Section 2 – The Retail Market

7

2.1 Store Numbers

7

2.2 Retail Sector Sales Performance & Growth

11

2.3 Retail Stock Trends

14

2.4 Business Performance

14

2.5 Staffing in the Retail Sector

18

2.6 Clothing Stores in New Zealand – A Case Study

20

Section 3 – The Consumer

23

3.1 Introduction – The Two Perspectives

23

3.2 2006 Population Census

23

3.3 Population Projections

24

3.4 Household Economic Survey (June 2010)

26

Section 4 – Key Retail Chains by Sector

27

Section 5 – The Global Powers of Retailing Top 250 Highlights

32

Section 6 – The Tourism Market

35

Section 7 – Top Retail Trends 2012

37

Appendix 1 – Industry Descriptions

40

Appendix 2 – ANZSIC 2006 vs ANZIC 1996 Reconciliation

42

The Retail Market in New Zealand - An Analysis

Section 1 – The New Zealand Economy

1.1 Key Economic Indicators

(Source: BusinessNZ Planning Forecast December 2012)

Executive Summary

Comments:

a) The overall global economic growth outlook remains relatively benign. However, the increasing influence of Asia (China) both in terms of exports and demand for protein from its rapidly increasing middle class is positive news for New Zealand exporters over the medium term.

b) Patchy growth is the order of the day in New Zealand. The housing market is showing positive signs of life and the Christchurch re-build is starting to gain momentum.

c) Employment growth is clearly evident in Christchurch but elsewhere results are flat- lining.

d) While business and consumer confidence is on the positive side of the ledger, households and businesses continue to take a cautious approach to new investment with debt reduction still a high priority. The household balance sheet is still being re- balanced.

e) A low inflationary outlook is keeping interest rates at historic lows with no prospect of increases over the short to medium term.

So, for the retailer, this spells out another tough year with every sale being hard won. Stock and margin management will be critical as will resource deployment and staff rostering. Like never before the retailer must deliver what it is that the customer wants. Retailers must consider all of the options – online presence, facebook, twitter, email marketing, texting etc., etc. If the customer wants it we must deliver – we have given the customer so much choice they are now definitely in the driver’s seat.

The real game changer is the mobile phone.

So if we look ahead what are the experts predicting? How do the various bank economists see the economy shaping up? The latest forward look released by Business New Zealand indicates the following:

1 GDP % Growth

(Source: ANZ, ASB, BNZ, National and Westpac)

Forecasts: Year Ending

Dec 2012

Dec 2013

Dec 2014

 

%

%

%

Highest

2.5

3.2

3.3

Average

2.5

2.7

2.6

Lowest

2.5

2.2

1.6

The Retail Market in New Zealand - An Analysis

2 % Change in Inflation (CPI)

(Source: ANZ, ASB, BNZ, National and Westpac

Forecasts: Year Ending

Dec 2012

Dec 2013

Dec 2014

 

%

%

%

Highest

1.3

2.6

3.3

Average

1.3

2.2

2.7

Lowest

1.1

1.9

2.4

3 Labour Cost Index

(Source: ANZ, ASB, BNZ, National, Westpac)

% Change (Wages & Salaries): Year Ending

Dec 2012

Dec 2013

Dec 2014

 

%

%

%

Highest

1.9

2.7

2.8

Average

1.8

2.1

2.4

Lowest

1.7

1.6

2.2

4 Unemployment (Household Labour Force Survey)

Unemployment %: Quarter Ending

Dec 2012

Dec 2013

Dec 2014

 

%

%

%

Highest

7.0

6.3

6.2

Average

6.9

6.2

5.7

Lowest

6.6

6.1

5.3

5 Interest Rates (90 Day Bills)

Dec 2012

Period Ending

Dec 2013

Dec 2014

 

%

%

%

Highest

2.8

3.5

4.8

Average

2.7

3.3

4.3

Lowest

2.7

3.2

3.8

The Retail Market in New Zealand - An Analysis

6 Exchange Rates

a) Australian dollar NZ$1 = Aust cents

 

Dec 2012

Dec 2013

Dec 2014

Highest

0.82

0.80

0.80

Average

0.79

0.79

0.79

Lowest

0.78

0.78

0.78

b)

US dollar

 

NZ$1 = US cents

Dec 2012

Dec 2013

Dec 2014

Highest

0.83

0.85

0.76

Average

0.82

0.81

0.74

Lowest

0.81

0.78

0.685

The Retail Market in New Zealand - An Analysis

Section 2 – The Retail Market

2.1 Store Numbers (Source: Statistics NZ)

Total Outlets by Region

Period: February 2012 (Released October 2012)

Statistics New Zealand has re-worked the classification system for businesses (ANZSIC) and the numbers below have been produced under ANZSIC 2006 (previously, ANZSIC 1996). These changes have had a significant impact on what is ‘in’ and what is ‘out’ in the retail sector demography analysis. For example, we now exclude such sectors as automotive repairs, household appliance repairs, footwear repairs, bakeries and cake kitchens, takeaway food operators and panel beaters to name a selection. On the plus side we now include all of those hardware retail stores that were previously included in the wholesale series.

Regional Council

Total Outlets (as defined above)

 

Region

% of total

Northland

1,115

3.4

Auckland

12,018

36.4

Waikato

2,989

9.1

Bay of Plenty

2,111

6.4

Gisborne

270

0.8

Hawkes Bay

1,076

3.3

Taranaki

795

2.4

Manawatu/Wanganui

1,555

4.7

Wellington

3,349

10.2

Total North Island

25,278

76.7

West Coast

263

0.8

Nelson

444

1.3

Tasman

324

1.0

Malborough

303

0.9

Canterbury

4,014

12.2

Otago

1,674

5.1

Southland

672

2.0

Total South Island

7,694

23.3

Total New Zealand

32,972

100.0

The five major regions – Auckland, Waikato, Wellington, Canterbury and Otago - account for 73% of the country’s retail outlets. Auckland leads the way with well over a third.

Relative to the latest regional population estimates the distribution of retail stores compares as follows:

% Retail Outlets

% Population

Feb 2012

2012 Latest

Estimate

Auckland

36.4

34.0

Waikato

9.1

9.4

Wellington

10.2

11.1

Canterbury

12.2

12.6

Otago

5.1

4.8

Auckland is a little more ‘over shopped’ relative to population and, if anything, Wellington is a little ‘under shopped’. Christchurch has seen a reduction both in population and store numbers.

The Retail Market in New Zealand - An Analysis

Outlet Types By Region (selected outlets only)

Source: Statistics New Zealand Period: February 2012

Notes: 1

As with the previous table, the table below is based on the new ANZSIC codes

(2006).

2

Store classification is based on turnover in the category. – For example, if an outlet had 55% of its business in sports goods and 45% in footwear it would be classified as a sports goods store.

Number of Outlets by Region

               

Books,

Supermarkets

Department

Clothing

Furniture***

Appliances

Chemists

Footwear

Stationery,

/Grocery

Stores

+ Electrical

****

Newspapers

Goods*

**

Northland

122

9

94

56

57

37

9

35

Auckland

1,232

68

1,501

775

722

462

219

339

Waikato

298

25

349

166

144

100

55

92

B.O.P

186

19

237

132

107

80

35

63

Gisborne

33

5

30

17

11

9

4

10

Hawkes Bay

105

9

120

77

47

51

16

30

Taranaki

88

6

89

50

37

33

17

33

Manawatu,

169

15

149

96

81

58

17

63

Wanganui

Wellington

379

35

430

213

174

144

80

121

Total North

               

Island

2,612

191

2,999

1,582

1,380

974

452

786

West Coast

35

2

19

12

14

6

5

8

Nelson

28

6

60

24

32

14

11

10

Tasman

28

3

30

16

13

17

4

8

Malborough

31

5

23

15

17

13

6

11

Canterbury

367

44

470

232

215

157

80

110

Otago

141

22

242

83

73

66

32

53

Southland

76

11

67

39

28

24

11

21

Total South

               

Island

706

93

911

421

392

297

149

221

Total New

               

Zealand

3,318

284

3,910

2,003

1,772

1,271

601

1,007

(*Includes specialist computer stores) (**Covered by two different ANZSIC codes – ‘newspapers and books’ and ‘stationery goods’) (*** Furniture, Floor Coverings, Houseware, Textile Goods Retailing) (**** Includes Pharmaceutical, Cosmetic and Toiletry Goods Retailing)

This analysis of outlet type by area considers only eight different categories of store. The full analysis from Statistics New Zealand covers 36 store types – this more detailed information is available on request.

The Retail Market in New Zealand - An Analysis

The full list of store types is:

Supermarket / Grocery Stores Fresh Meat / Fish / Poultry Retailing Fruit and Vegetable Retailing Liquor Retailing Other Specialised Food Retailing Department Stores Clothing Retailing Footwear Retailing Other Personal Accessory Retailing Manchester and Other Textile Goods Retailing Furniture Retailing Floor Covering Retailing Houseware Retailing Electrical, Electronic and Gas Appliance Retailing Computer and Computer Equipment Retailing Other Electrical and Electronic Goods Retailing Sports / Camping Equipment Retailing Toy and Game Retailing Newspaper / Books Retailing Stationery Goods Retailing Entertainment Media Retailing Marine Equipment Retailing Pharmaceutical, Cosmetic, Toiletry Retailing Antique and Used Goods Retailing Hardware and Building Retailing Garden Centre Retailing Flower Retailing Watch and Jewellery Retailing Car Retailing Motor Cycle Retailing Trailer and Caravan Retailing Motor Vehicle Parts Retailing Fuel Retailing Tyre Retailing Non-Store Retailing Commission-Based Buying and/or Selling

The Retail Market in New Zealand - An Analysis

Retail Outlets By Store Type

Total New Zealand – February 2012

Store Type

Number of

% Share

% Change

Outlets

on Feb

2011

Supermarket and Grocery Stores

3,317

10.1

+0.8

Fresh Meat/Fish/Poultry Retailing

660

2.0

-0.5

Fruit and Vegetable Retailing

484

1.5

+1.3

Liquor Retailing

941

2.9

+3.1

Other Specialised Food Retailing

964

2.9

+3.3

Department Stores

284

0.9

-1.4

Clothing Retailing

3,910

11.9

n/c

Footwear Retailing

601

1.8

-0.5

Other Personal Accessory Retailing

186

0.6

-5.6

Manchester & Other Textile Goods Retailing

504

1.5

-2.5

Furniture Retailing

737

2.2

-1.1

Floor Covering Retailing

482

1.4

-1.2

Houseware Retailing

280

0.8

-5.1

Electrical, Electronic & Gas Appliance Retailing

1,149

3.5

-3.0

Computer & Computer Peripheral Retailing

405

1.2

+1.5

Other Electrical Equipment Retailing

218

0.6

+10.7

Sports/Camping Equipment Retailing

1,177

3.6

+2.0

Toy & Game Retailing

223

0.7

n/c

Newspaper & Books Retailing

642

1.9

-6.0

Stationery Goods Retailing

365

1.1

+1.4

Entertainment Media Retailing

118

0.4

-13.9

Marine Equipment Retailing

292

0.9

-1.4

Pharmaceutical, Cosmetic, Toiletries Retailing

1,271

3.9

+2.2

Antique and Used Goods Retailing

910

2.7

-5.3

Hardware & Building Supplies

1,447

4.4

-2.6

Garden Centre Retailing

437

1.3

-4.3

Flower Retailing

452

1.4

-3.8

Watch & Jewellery Retailing

584

1.8

-4.7

Car Retailing

1,638

5.0

-1.3

Motor Cycle Retailing

260

0.8

-8.8

Trailer & Caravan Retailing

101

0.3

-5.6

Motor Vehicle Parts Retailing

344

1.0

+2.1

Fuel Retailing

1,182

3.6

-1.1

Tyre Retailing

654

2.0

-0.6

Non Store Retailing

1,497

4.5

+3.1

Commission-Based Buying and/or selling

277

0.8

+1.1

Other Store-Based Retailing n.e.c.*

3,985

12.1

-3.8

Total All Retail

32,978

100.0

-1.0%

(*n.e.c. not elsewhere classified)

Comments

Overall store numbers at 32,978 were 1% down on February 2011 – a net loss of 321 stores.

The Retail Market in New Zealand - An Analysis

Number of Outlets

If we look at the store numbers over the last decade we see some interesting changes. The stand out movements are summarised below:

 

2000

2012

% Change

Total Store Numbers

30,160

32,978

+9.3%

The Big Movers:

Motor Cycle Retailing

156

260

+67

Motor Vehicle Parts Retailing

246

344

+40

Liquor Retailing

676

941

+39

Other Specialised Food Outlets

649

964

+49

Clothing Retailing

2,570

3,910

+52

Footwear Retailing

480

601

+25

Floor Coverings

358

482

+35

Housewares Retailing

208

280

+35

Electrical/electronic/gas appliances

997

1,149

+15

Computer/computer Equipment

254

405

+59

Stationery Goods Retailing

249

365

+47

Sport & Camping Equipment

836

1,177

+41

Watch & Jewellery Retailing

505

584

+16

Toy & Game Retailing

172

223

+19

The Big Losers:

Fuel Retailing

1,643

1,182

-28

Fresh Meat /Poultry /Fish Retailing

764

660

-14

Fruit & Vege Retailing

546

484

-11

Newspapers & Book Retailing

941

642

-32

Antique & Used Goods Retailing

1,174

910

-22

2.2 Retail Sector Sales Performance & Growth

Source: Statistics New Zealand

Long Term Trend

12 Months

Total Retail Sales $ m

% Change on Prior Year

Index

 

Ending

(year 2005 = 1,000)

Dec

2012

70,300

+3.7

1,255

 

2011

67,800

+4.1

1,211

 

2010

65,100

+3.7

1,162

 

2009

62,800

-0.8

1,121

 

2008

63,300

+0.3

1,130

 

2007

63,100

+6.2

1,127

 

2006

59,400

+6.1

1,061

 

2005

56,000

+6.5

1,000

Note:

The above includes all retail categories, including the motor vehicle sector, cafes and restaurants, hotels, accommodation etc.

Comments

1 Over the eight-year period retail sales grew by $14.3b or 25.5% (around 3.5% p.a.).

The Retail Market in New Zealand - An Analysis

2 Over this same period the ‘All Groups’ consumer price index demonstrated the following:

Movement In CPI All Groups – Year on Year

12 Months Ending Dec

 

Index

%

(2004 = 1,000)

2012

+0.9

1,194

2011

+1.8

1,183

2010

+4.0

1,161

2009

+2.0

1,116

2008

+3.4

1,095

2007

+3.2

1,059

2006

+2.6

1,026

2005

+3.2

1,000

Thus, over this period, retail sales have grown in dollar terms by nearly 26% compared with general price rises of just over 19%. The 4% increase in CPI in 2010 includes the increase in GST.

How have the various regions of the country performed over the last year or so? Has there been much variability from north to south?

 

12 Months Ending December 2012 $m

12 Months Ending December 2011 $m

% Change

Auckland Regional Council

23,848

22,976

+3.8

Waikato Regional Council

7,250

6,452

+12.4

Wellington Regional Council

7,560

7,452

+1.4

Remainder of North Island

14,206

14,283

-0.5

Total North Island

52,864

51,162

+3.3

Canterbury Regional Council

9,503

8,956

+6.1

Remainder of South Island

7,936

7,697

+3.1

Total South Island

17,439

16,653

+4.7

Total New Zealand

70,303

67,815

+3.7

Comments

The Waikato and Auckland regions have performed reasonably. Christchurch is making a steady comeback after the earthquakes. Wellington and the remainder of the North Island have been very sluggish.

The Retail Market in New Zealand - An Analysis

Retail Sales - By Sector

12 Months ending December

         

%

Category

2012

2011

Change

 

$m

 

$m

 

2012 vs

%

%

2011

Supermarket & Grocery Stores

16,693

23.7

16,563

24.4

+0.8

Specialised Food

1,378

2.0

1,329

2.0

+3.7

Liquor

1,354

1.9

1,266

1.9

+7.0

Non Store & Commission Based

851

1.2

837

1.2

+1.7

Department Stores

3,809

5.4

3,682

5.4

+3.4

Furniture/Floor Coverings/ Houseware/Textiles

1,873

2.7

1,726

2.5

+8.5

Hardware/Building/Garden

4,859

6.9

4,553

6.7

+6.7

Supplies

Recreational Goods

1,908

2.7

1,905

2.8

+0.2

Clothing/Footwear/Accessories

3,545

5.0

3,544

5.2

n/c

Electrical & Electronic Goods

2,643

3.8

2,704

4.0

-2.3

Pharmaceutical & Other Store Based Retailing

4,786

6.8

4,522

6.7

+5.8

 

43,699

62.2

42,631

62.9

+2.5

Accommodation

2,736

3.9

2,672

3.9

+2.4

Food & Beverage Service

7,111

10.1

6,881

10.2

+3.3

 

9,847

14.0

9,553

14.1

+3.1

Motor Vehicles & Parts

9,138

13.0

8,207

12.1

+11.3

Fuel

7,619

10.8

7,425

10.9

+2.6

 

16,757

23.8

15,632

23.0

+7.2

Total

70,303

100

67,815

100

+3.7

In the latest year the growth slowed a little (3.7%) compared with what was achieved in 2011 relative to 2010 (5.5%). Last year we had a lift from the Rugby World Cup.

Across the various store types there is considerable variability – “electrical and electronic goods” went backwards (-2.3%) but this is likely to be the result of deflation in this store type. The supermarket sector showed only modest growth (+0.8%) and this no doubt reflects the competitiveness of these stores.

The focus in the short to medium term is going to be margin management. Retailers will need to retain their competiveness but take every opportunity to improve margin. The necessity for this is underscored by the margin analysis that follows later in this document.

The store type classifications used in this analysis are based on the ANZSIC 2006 codes. For the first time we see the appearance of non-store sales as a specific category. This will include all pure play online retailers but it will not include the online sales achieved by retailers with a bricks and mortar presence.

Note

1 There are some minor differences in some totals – this is due to rounding at the sub- category level.

2 An outline of what stores are in each category follows in Appendix 1.

The Retail Market in New Zealand - An Analysis

2.3 Retail Stock Trends

We have seen how the sales levels have changed over time but how good is the stock management? How have retail stocks varied relative to change in sales performance?

Category

Sales 12 Months Ending December 2012 vs. 2011

Stock % Change End Dec 2012 vs. 2011

%

%

Supermarket & Grocery Sales

+0.8

+8.1

Specialised Food

+3.7

+23.4

Liquor Retailing

+7.0

+1.1

Non Store & Commission Based Retailing

+1.7

+17.9

Department Stores

+3.4

+3.1

Furniture, Floor Coverings, Houseware, Textiles

+8.5

+6.3

Hardware, Building, Garden Supplies

+6.7

n/c

Recreational Goods

+0.2

-2.6

Clothing, Footwear, Accessories

n/c

+5.3

Electrical & Electronic Goods

-2.3

-4.8

Pharmaceutical & Other Store Based Retailing

+5.8

+4.8

Accommodation

+2.4

-3.3

Food & Beverage Sales

+3.3

+0.8

Motor Vehicles & Parts

+11.3

+12.5

Fuel

+2.6

+7.8

Total

+3.7

+5.0

Comments

In the main, retailers have managed their stocks reasonably well. The increase in stock was slightly ahead of the increase in sales and in fact, was more in line with the sales growth of the previous year. This may have reflected a degree more optimism than the market delivered. There was some variability by store type.

2.4 Business Performance

Statistics New Zealand conducts an annual survey of business performance (Annual Enterprise Survey). The latest results available are for the 2011 year (gathered during 2012).

Note:

Some retail categories are not available due to issues of confidentiality. For example, specific data for supermarkets and department stores is not available.

Data is, in general, at a level lower than that normally reported by Statistics New Zealand, therefore the details shown must be treated with caution.

Definitions of terms used are as follows:-

a Sales: Closing Stock This is a crude measure of stock turn based on stock valued at cost. For example: Liquor retailing showed total sales of $1,149m and stock at the end of the period of $145m. The ratio calculated is 7.9.

b Salaries & Wages/Sales - This is the total cost of salaries and wages, including that paid to working proprietors, divided by total income.

The Retail Market in New Zealand - An Analysis

c Gross Margin – This has been calculated on the basis of sale of goods not further processed, minus purchase of goods for re-sale, divided by sale of goods not further processed.

d Employee Count Is Based On RME – Rolling, monthly employee count. This replaces full-time equivalents (FTE) which has been used in the past.

e Surplus Before Income Tax - Total income less total expenditure (excluding salaries and wages paid to working proprietors) divided by total income.

The figures are derived from a specific survey. Therefore, the turnover figures will not necessarily be the same as those derived from the retail sales series.

Business Performance Retail Trade and Accommodation

 

2011

2010

2009

2008

Sales: Closing Stock (stock turn)

10.4

10.4

10.5

10.1

Salaries/Wages % Sales (%)

13.3%

13.2%

13.2%

12.7%

Gross Margin (%)

26.2

26.2%

26.2%

26.6%

Income Per Employer ($000)

208.2

202.0

193.9

195.4

Surplus Per Employer ($000)

6.2

5.9

3.9

5.9

Return on Equity (%)

17.6%

17.4%

12.7%

19.1%

Return on Total (%) Assets

6.0%

6.0%

4.3%

6.7

Net Margin (before tax and excluding salaries and wages paid to working proprietors)

3.0

2.9

2.0

3.0

Comments

Over the four years under review, performance across the whole industry has been reasonably consistent.

On some measures the 2009 performance was below 2008 but it would appear the necessary corrections have been made in 2010 and this has been sustained in 2011.

However, when we look at the bottom line achieved year by year for the last eight years we see the impact of the competitive price driven market:

Net Profit Before Tax As % of Total Income

2011

3.0

2010

2.9

2009

2.0

2008

3.5

2007

4.1

2006

4.2

2005

5.2

2004

5.5

2003

6.3

Margin erosion has been significant.

The Retail Market in New Zealand - An Analysis

Analysis for 2010 (data gathered during 2011)

Sector

Sales:

Salaries & Wages % to Sales

Gross

Income

Surplus

Closing

Margin

Per RME

Per RME

Stock

(a)

(b)

(c)

(d)

(d)

 

Ratio

%

%

$000

$000

Fresh Meat/Fish/ Poultry Retailing

23.7

14.1

27.7

209.7

0.5

Fruit/Veg Retailing

21.5

11.6

20.6

216.4

2.8

Liquor Retailing

9.9

7.0

20.4

463.9

7.4

Other Specialised Food Retailing

7.8

18.8

25.8

134.4

(-2.8)

Furniture Retailing

5.0

16.0

33.0

245.4

(-9.1)

Floor Coverings Retailing

13.1

12.2

29.0

400.5

8.8

Houseware Retailing

6.0

19.7

43.3

143.6

(-13.6)

Manchester Other Textile Goods Retailing

4.7

22.0

31.8

165.1

(-11.1)

Electrical/ Electric/Gas Appliance Retailing

7.3

11.5

21.8

326.2

2.8

Computer & Computer Peripheral Retailing

11.7

10.4

26.9

371.8

18.7

Hardware & Building Supplies Retailing

6.3

12.3

27.1

306.9

6.0

Garden Supplies Retailing

6.7

19.5

36.2

157.4

2.7

Sport & Camping Equipment Retailing

4.0

15.3

39.0

221.9

8.9

Entertainment & Media Retailing

5.3

12.0

40.0

221.6

5.3

Newspaper/Book Retailing

4.4

15.2

45.1

161.3

6.6

Clothing Retailing

5.2

16.7

48.9

156.7

5.3

Footwear Retailing

5.0

18.2

50.2

145.1

5.3

Watch & Jewellery Retailing

2.8

14.6

48.2

227.6

50.2

Pharmaceutical/ Cosmetics/ Toiletry Goods Retailing

12.4

17.9

34.9

201.2

12.4

Stationery Goods Retailing

7.2

16.1

34.4

220.0

8.7

Flower Retailing

15.7

18.1

45.6

160.1

16.1

Antique & Used Goods

6.7

19.2

36.1

170.1

2.3

Non Store Retailing

12.6

13.4

46.5

323.5

22.1

Total Retail

10.4

13.3

26.2

208.2

6.2

Note:

For reasons of confidentiality, supermarket and department store data is combined. These two sectors account for some 46% of ‘regular retail’ and nearly 30% of all retail. Their absence has a marked impact on the ‘total retail’ figure above and the comparison with other sectors.

The Retail Market in New Zealand - An Analysis

Net Profit Before Tax As % Of Total Income

Sector

2011

2010

2009

2008

%

%

%

%

Fresh Meat/ Fish/ Poultry Retailing

0.2

2.1

1.4

0.9

Fruit & Vegetable Retailing

1.3

*

1.6

2.9

Liquor Retailing

1.6

0.8

2.4

3.2

Other Specialised Food Retailing

(-2.1)

(-2.3)

1.2

1.7

Furniture Retailing

(-3.8)

(-3.8)

(-2.4)

(-2.3)

Floor Coverings Retailing

2.2

2.2

0.8

0.3

Houseware Retailing

(-9.1)

(-4.4)

(-8.1)

2.6

Manchester and Other Textile Goods

(-6.6)

2.7

1.2

3.6

Electrical/Electronic/Gas Appliances

0.9

0.9

0.5

4.7

Computer & Computer Peripheral Retailing

5.2

3.0

2.2

10.4

Hardware & Building Supplies Retailing

1.9

1.4

(*)

4.3

Garden Supplies Retailing

1.7

0.3

(-1.8)

BE

Sports & Camping Equipment Retailing

4.0

6.1

3.8

0.5

Entertainment Media/Toys/Games

2.3

3.1

(-0.9)

(-1.3)

Newspaper Book Retailing

4.2

5.5

2.9

4.1

Clothing Retailing

3.4

1.8

1.3

3.0

Footwear Retailing

3.6

3.0

1.7

4.8

Watch & Jewellery Retailing

22.4

16.4

9.9

9.4

Pharmaceuticals/cosmetics/Toiletry Goods Retailing

6.2

6.7

5.9

5.6

Stationery Goods Retailing

4.0

2.5

1.0

3.4

Flowers Retailing

9.5

3.6

*

(-4.4)

Antique & Used Goods

1.3

2.8

2.8

3.0

Non Store Retailing

6.8

4.7

4.8

5.1

Total All Retail

3.0

2.9

2.0

3.0

Note:

* = less than 0.5% (*) = less than -0.5% BE = Break Even

Comments

This analysis has been taken to a detailed level and the output should be viewed with caution. The numbers are indicative only and due to small base sizes the sampling error is, in some cases, quite large. The numbers should not be relied upon for any significant decisions.

The net profit calculation excludes salaries and wages to working proprietors from the cost side of the equation.

Across the past decade we have seen the margin available in the sector shrink. From 6.3% in 2003 we are now down to 3%. The latest year (2011) was slightly better than 2010 which in turn showed a little improvement over 2009 – let’s hope this is an indicator of improvements to come.

The Retail Market in New Zealand - An Analysis

2.5 Staffing in the Retail Sector

Geographic Distribution of Retail Staff

Note: The table below is based on ANZSIC 2006 and ties back into the outlet analysis in an earlier section.

2012

 

Share Of Outlet Numbers

Staff Numbers

000’s

Share Of Staff Numbers

%

%

Northland

3.4

6,120

3.1

Auckland

36.4

61,010

31.4

Waikato

9.1

17,370

8.9

Bay Of Plenty

6.4

12,220

6.3

Gisborne

0.8

1,680

0.9

Hawkes Bay

3.3

6,820

3.5

Taranaki

2.4

5,060

2.6

Manawatu/Wanganui

4.7

10,630

5.5

Wellington

10.2

21,680

11.2

Total North Island

76.7

142,590

73.4

West Coast

0.8

1,600

0.8

Canterbury

12.2

27,000

13.9

Otago

5.1

10,820

5.6

Southland

2.0

4,880

2.5

Tasman

1.0

2,060

1.1

Nelson

1.3

2,950

1.5

Malborough

0.9

2,250

1.2

Total South Island

23.3

51,560

26.6

Total NZ

100

194,150

100

Comments

Auckland accounts for over 36% of the store numbers but only 31% of staff. This could be a reflection of bigger stores leading to economies of scale or it could simply be greater cost awareness in Auckland leading to fewer staff.

Wellington is the reverse of this – 11.2% of staff vs 10.2% of store numbers.

So… if that’s the geographic spread how does the staffing level compare with store numbers at a store type level?

Once again, this analysis has been undertaken on the basis of the 2006 ANZSIC codes – see section 2.1 – ‘Store Numbers’ for the definitions.

The Retail Market in New Zealand - An Analysis

Staff Numbers by Store Type – February 2012

 

Share of

Staff

Share Of

Average/

Outlet

Numbers

Staff

Store

Numbers

000’s

Numbers

(Employee

%

%

Count)

Supermarket/Grocery Stores

10.1

53.6

27.6

16.2

Fresh Meat, Fish, Poultry

2.0

2.8

1.4

4.2

Fruit & Vegetable Retailing

1.5

2.0

1.0

4.1

Liquor Retailing

2.9

3.2

1.6

3.4

Other Specialised Food Retailing

2.9

2.6

1.3

2.7

Department Stores

0.9

17.3

8.9

60.9

Clothing Retailing

11.9

15.7

8.1

4.0

Footwear Retailing

1.8

3.3

1.7

5.5

Other Personal Accessory Retailing

0.6

0.7

0.4

3.8

Manchester and Other Textile Good Retailing

1.5

2.1

1.1

4.2

Furniture Retailing

2.2

2.4

1.2

3.3

Floor Covering Retailing

1.4

1.9

1.0

3.9

Houseware Retailing

0.8

1.1

0.6

3.9

Electrical/Electronic & Gas Appliance Retailing

3.5

6.5

3.3

5.7

Computer & Computer Peripheral Retailing

1.2

1.1

0.6

2.7

Other Electrical & Electrical Goods Retailing

0.6

0.5

0.3

2.3

Sports & Camping Equipment Retailing

3.6

4.6

2.4

3.9

Toy & Game Retailing

0.7

0.4

0.2

1.8

Newspaper & Book Retailing

1.9

3.1

1.6

4.8

Stationery Goods Retailing

1.1

2.0

1.0

5.5

Entertainment Media Retailing

0.4

0.5

0.3

4.2

Marine Equipment Retailing

0.9

0.7

0.4

2.4

Pharmaceutical, Cosmetic, Toiletries Retailing

3.9

9.6

4.9

7.6

Antique & Used Goods Retailing

2.7

1.4

0.7

1.5

Hardware & Builders Supplies

4.4

15.9

8.2

11.0

Garden Centre Retailing

1.3

1.8

0.9

4.1

Flower Retailing

1.4

0.7

0.4

1.5

Watch & Jewellery Retailing

1.8

2.5

1.3

4.3

Car Retailing

5.0

9.0

4.6

5.5

Motor Cycle Retailing

0.8

1.3

0.7

5.0

Trailer & Caravan Retailing

0.3

0.1

0.1

1.0

Motor Vehicle Parts Retailing

1.0

1.4

0.7

4.1

Fuel Retailing

3.6

8.5

4.4

7.2

Tyre Retailing

2.0

2.6

1.3

4.0

Non-store Retailing

4.5

2.4

1.2

1.6

Commission-Based – Buying and / or Selling

0.8

*

*

*

Other Store Brand Retailing, n.e.c.

12.1

8.6

4.4

2.2

Total Number

100

194.2

100

5.9

Note:

* = less than 0.5%

Comments:

Over a quarter of all staff who work in the retail sector do so in the supermarket/grocery store type which numerically accounts for less than 10% of all outlets. The average per

The Retail Market in New Zealand - An Analysis

store in this store type, at 17.4, is low due to the impact of dairies and small grocery stores.

Department stores account for nearly9% of all staff but less than 1% of store numbers.

So… what can all of this data tell us? How can we paint a picture of a sector of the market with these numbers?

Set out below is a statistical portrait of the clothing retail sector. In reviewing this it needs to be realised that we are not considering all sales of clothing but rather sales through clothing stores. This does not account for clothing sales through outlets such as department stores, sports stores etc.

2.6 Clothing Stores in New Zealand – A Case Study(2012 Version)

It is realised that this same case study has been run for the last few years in this document. We have decided to stay with it as it clearly demonstrates how publicly available data can be used to paint a picture of a market. A similar analysis could be done for any other sector.

2.6.1 Numbers of stores / growth

Year Ending

Number of Clothing Stores

% Change Year on Year

Feb

2012

3,910

n/c

2011

3,910

+0.9

2010

3,874

-1.6

2009

3,938

+0.5

2008

3,901

+5.7

2007