13 Jun 2011

Retailing still tough

7:02 am on 13 June 2011

There are signs that people are opening their purses and wallets a little wider, but retailers say trading conditions remain tough.

Figures on retail sales for the first three months of the year are to be released on Wednesday. While a slight improvement is expected, Goldman Sachs senior economist Philip Borkin says it's off a very low base.

He says most people are continuing to put spare cash into repaying debt.

Last week, retail electronic card transactions fell for the first time in three months in May, partly due to unseasonably warm weather which affected the sale of winter merchandise.

Briscoe Group owns the Briscoes Homeware, Rebel Sports and Living & Giving chains. Managing director Rod Duke says Christchurch has been one recent bright spot as quake victims have used insurance payments to replace their broken possessions.

Some economists detect signs that households have debt down at a comfortable level and are increasing their discretionary spending, but Mr Duke says there's no sign of it outside Christchurch.

He believes retailers will be up against it for the foreseeable future and more struggling firms will go under this year.

Many retailers may be pinning their hopes on the Rugby World Cup, but Mr Duke says only bars, restaurants and accommodation providers can expect to do well from it.

He does not expect to sell many pots and pans or toasters to rugby visitors.