Briscoes sees shift in consumer behaviour to savings
Briscoes Group said there has been an unquestionable shift in consumer behaviour toward saving and further belt tightening seems likely after today's government budget.
"The impact of today's budget is difficult to predict, particularly the impact on consumers' behaviour in the face of anticipated cuts in Government spending and changes to KiwiSaver and Working for Families, but there must be belt-tightening implications for us all as New Zealand faces such a huge operating deficit," chairman Rosanne Meo told the company's annual meeting today.
Managing director Rod Duke said that in the more than 20 years he had been running a business in this country he could not recall experiencing such prolonged negative economic conditions.
"There can be no doubt that there has been an unquestionable shift in consumer attitudes towards saving, borrowing and spending, and that this is having a widespread impact on retail sales.
"Retailers are bearing the brunt for this changing behaviour. And of course, as one would expect, the devastating Christchurch Earthquake to have made matters worse."
Customers were not trading down on quality, as normally happens in recessions, but were saving and paying down debt.
So retailers had to entice customers to spend rather than save or retire debt.
"This I believe will require an increased media spend and perhaps deeper discounting," he said.
"With that back-drop I can see trading conditions going forward being very much the same as we have experienced in the period just passed.
"It's going to remain tough and I strongly believe that our retail brands are best placed to continue to compete in this environment," he said.
Stuart Johnstone and Alaister Wall were re-elected as directors.
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