Retail industry welcomes COVID-19 alert level 1 move 'as soon as safe to do so'

The retail industry welcomes a move to COVID-19 alert level 1 - but only as soon as it's safe to do so.

Under current alert level settings, which Prime Minister Jacinda Ardern announced on Monday will remain in-place for at least another week, retail foot traffic has been slowly improving.

Head of Retail New Zealand Greg Harford said since Auckland moved to alert level 2.5, he'd seen a huge increase in the number of shoppers using the COVID-19 tracer app.

"This has helped consumers be a little more confident about venturing out," Harford said.

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Lifting of the second alert level 3 restrictions at just before midnight on August 30 corresponded to a bounce-back in retail spending, he said. Businesses with strong digital offering were doing particularly well. 

But retailer experience was still very "mixed". Loosening of restrictions would help to increase confidence, particularly for those struggling to make in-store sales.

"Retail NZ is keen to see a move back to Level 1 and greater normality as soon it is safe to do so," he added.

Latest Paymark electronic card data showed that in the last two weeks of August when Auckland was back in COVID-19 alert level 3, spending in the region was down 44 percent and 42 percent respectively.

But the first day of alert level 2.5 saw spending soar. Many merchants recorded spending levels at 50 to 100 percent higher year-on-year.

Across the month, nationwide annual spending growth for core retail merchants was down 0.1 percent. In Auckland, it was down 15 percent and in the remaining regions, it was up 9.1 percent.

Sectors most affected by a drop in spending during the month of August included accommodation, down 36.1 percent, clothing and footwear, down 27.5 percent and electrical and electronic goods, down 11.4 percent.

In a Treasury weekly economic update to September 11, data from NZTA, Paymark and Verifone showed "heavy traffic volumes" rebounded to slightly above 2019 levels. Card spending lifted to similar levels as the previous alert level 1.

However, construction activity and sales across a range of industries fell in the June 2020 quarter. Business confidence showed improvement, but remained in negative territory.

At a press conference on Monday afternoon, Prime Minister Jacinda Ardern confirmed that the existing settings - alert level 2.5 for Auckland and alert level 2 for the rest of the country - will remain in-place. The decision will be reviewed again on Monday, September 21.