Retail prices could rise as much as 10 percent this year due to unrelenting inflationary pressure, the organisation representing business owners says.
A survey of Retail NZ members suggested prices could increase by 7-10 percent. Photo: 123rf
Inflation figures being released today are expected to show consumer prices rising at their fastest rate in 30 years.
A combination of pandemic effects, higher fuel and housing costs and supply chain disruptions is predicted to push annual inflation through the 6 percent level.
Consensus forecasts are that the consumer price index rose 1.5 percent for the final three months of last year taking the annual rate to 5.7 percent, but there are some predictions the annual rate will hit more than 6 percent.
Retail NZ chief executive Greg Harford said retail costs have been under pressure for a long time and the industry was seeing that in prices.
"We're expecting to see a lot more of that over the coming year.
"A recent survey of Retail NZ members suggests we are going to see average price increases of somewhere between seven and 10 percent over the next quarter.
"There's huge pressure on the retail market and those cost increases are going to be passed on to customers."
Harford said the recovery from last year's Delta lockdowns had been lagging, as consumers showed caution in returning to stores.
Data from Stats NZ shows core retail electronic card spending was only marginally up during December.
Harford said the recovery had not been comparable to that of 2020 following the first lockdowns.
"I think there's still quite a lot of customer nervousness getting out and about to the shops in the face of potential spread of Covid-19.
"But also, the more you lock down, the harder it becomes to dig out a bit, because there's a lot more uncertainty and customers are just a bit worried about the cash that they've got available to them."