Retail spending is up on this time last year but the industry says it's not all good news - and there are warnings inflation could be on the way.
Data from Retail NZ's latest sales index, released in its Retail Radar report on Monday, shows New Zealanders spent 29.8 percent more on average at each Retail NZ member site, compared to March 2020.
However, New Zealand entered COVID-19 alert level 4 in the last week of March last year - forcing all of the country's retail stores to close.
Retail NZ chief executive Greg Harford says the results are uneven across the retail sector.
"Despite the fact that spending was up in the first quarter of the year, not all retailers are seeing the benefits.
"Forty-two percent of retailers did not hit their sales targets for the last quarter and more than two-thirds of Auckland retailers failed to perform.
Harford said Kiwis should expect price increases.
"There are significant inflationary pressures building, as the cost of procurement and freight increase, and the cost of employing staff goes up.
"Around two-thirds of Retail NZ members expect to see prices increase over the next quarter."
Harford said two-thirds of retailers also expect to be impacted by the minimum wage increase. The minimum wage increased to $20 per hour on Thursday, despite opposition political parties and business groups calling for a delay to the hike.
That increase will affect all wages in the retail sector, Harford said.
"Thirty-seven percent of retailers say that they will now have less ability to reward performance, while a third will be looking to reduce hours or the total number of people employed over time.
"In a market where many small business owners struggle to pay themselves the equivalent of the minimum wage, they need to take steps to manage cost increases."
But survey data from the Retail Radar report shows businesses are more confident they will survive in the next year.
In February, only 63 percent of retailers felt they would survive the next 12 months - that's increased by 10 percent to 73.
Compared to only 47 percent of retailers feeling satisfied with the Government's response to COVID-19 in February, 55 percent felt satisfied in March. The report said those survey results could be pointed to the entire country moving back to alert level 1, after a short stint under restrictions due to handful of coronavirus cases being found in Auckland.
