First Retail Group says retailers will have to look at sensational offers if they want to stand out from their competitors and stay competitive in the coming months. Photo: RNZ / Rebekah Parsons-King
Big nationwide retailers will need to dig in to maintain market share if the forecast recession hits and competition for money-conscious consumers intensifies.
Large retailers, such as Briscoe Group and Hallenstein Glassons, have reported solid sales recently but are wary of the challenging trading period ahead, as the higher cost of living forces customers to pull back on discretionary spending.
First Retail Group managing director Chris Wilkinson said large retailers would have to fight to maintain customers if the economy turned south, as consumers became more selective.
"Retailers are going to be very cautious in the way they're going to go forward, they're going to have to work extra hard to maintain market share and it's going to become increasingly competitive," Wilkinson said.
"We know that consumers are shifting from products to experiences, so that makes it even more difficult for retailers to maintain performance and grow."
Wilkinson said retailers would need to stand out from their competitors to maintain market share in the coming months.
"Retailers have to look at developing standout offers, they're looking for differentiation," he said.
"We're already seeing retailers acting towards this right now, some of the home improvement retailers are coming out with weekly and monthly offers with some fairly deep discounting.
"So, moving from the low, everyday price model that has been popular in the last decade to more of a responsive, promotional schedule, that's working with their suppliers to be able to get those really stand out and spectacular offers."
Retailers wanting to keep a lid on costs were taking advantage of automation and online shopping, rather than focusing on opening newer and larger retail sites, Wilkinson said.
"We're seeing retailers working to blend consumers' relationships, so whether they're shopping online or shopping in store, making sure that retailers are working to broaden their reach and their audience by encouraging more online trade," Wilkinson said.
"We're also seeing rationalization of retail sites, so some of the bigger retailers are closing sites, with a focus on concentrating consumers into a smaller, portfolio and really just efficiency, so retailers are looking for spaces that will give them greater efficiencies operationally."