The business world has been left severely disrupted due to the coronavirus pandemic. New Zealand has largely escaped much of the downturn caused by the virus. Early intervention and adoption of robust health and safety measures have restricted the total COVID-19 infection count to under 1200 cases (as of writing). However, other facets of life in New Zealand have taken a beating, particularly trade.
COVID-19’s impact on New Zealand export, import and retail
60% of New Zealand’s total economic activity comprises of international trade. The island nation heavily depends on exports and imports for its day-to-day necessities. However, with other nations having instituted country-wide lockdowns and banned international travel indefinitely, exports and imports have been abruptly curtailed.
The retail sector has been significantly impacted by this global health crisis. With many of the country’s trade partners not engaging in trade, New Zealand has been unable to import many commodities, resulting in retail stores suffering from product shortage.
Read more interesting News here at The Right News Network.
Take New Zealand’s biggest trading partner, China, which accounts for 28% of the total annual international trade that the island nation engages in. The country is one of the largest suppliers of electronic devices like televisions, mobile phones, and laptops. However, with the Asian behemoth having shut down multiple factories and manufacturing units because of the coronavirus pandemic, New Zealand electronic retail stores are facing a severe crunch in available products. Replenishment is also difficult since China and other high volume electronics exporters like Singapore, Malaysia, Japan, the US, Italy and Denmark have also restricted international trade.
The medical sector is also facing a dire shortage of personal protective equipment and medical technology parts. Largely due to the backlog in supplies that haven’t been dispatched from China.
Possibly the most impacted are retail stores that export New Zealand-grown raw materials overseas for processing/production and import the finished goods back into the country for sale. Take outdoor clothing brand Kathmandu or furniture store Frankco & Simon Furniture, two companies that follow this export-import business policy. Not only are batches of their raw material exports still stuck in China but there is a limited likelihood of the finished products reaching the country any time soon. Luckily for these brands and a few others, the last batches of shipment arrived sometime in December 2019 and January 2020, with the stocks tiding them over.
Alternative sources sought after
Given that a large part of the New Zealand retail sector depends on China, the island nation is now looking for alternative options for its imports.
Grocery and department stores in particular, have found it easy to source products that are as competitively priced from other nations like Malaysia, Australia, Indonesia, the United States and Singapore. With the exception of hand sanitizers and face masks, retail stores that sell day-to-day necessities are not experiencing significant problems in replenishing their stocks.
Another route that New Zealand’s retailers are choosing is e-commerce. With social distancing making the retail shopping experience a tedious one, online shopping is not only providing a safer way to make purchases but also reducing time to shop. This is particularly prominent in the pharmaceutical retail sector, where there’s been a 275% rise in the adoption of e-commerce sites. There’s also a growth in the number of industry-specific marketplaces (like Storbie) where multiple retail stores sell their products.
In addition to the above, many New Zealand retail stores and small businesses are adopting the “Shop It Forward” business model. Here, customers continue to place an order for what they want online. They make the payment for the product, irrespective of whether it’s available or not. The retail stores will ship and deliver the product at a later date when the New Zealand Government allows local and international trade to resume. This way, small businesses and retail stores continue to receive money to operate during the coronavirus pandemic and work to source products from other suppliers.
Retail lay-offs still a possibility despite Shop It Forward and Government wage subsidy
Apart from bringing in much-needed capital for the retail store, the Shop It Forward model can prevent lay-offs in small retail outlets by providing timely funding for wages.
Similarly, the New Zealand Government’s wage subsidy, which was extended for the third time in August 2020, was expected to give retail stores a reprieve and prevent lay-offs. Since only retail businesses that have lost over 30% of their sales and have a $150,000 wage bill cap during the COVID-19 pandemic are eligible to apply for the subsidy, retailers who don’t qualify are still at risk of having to fire their staff to make ends meet.
According to Retail New Zealand, the country’s largest association for retailers, over 10,000 retail store workers in New Zealand could lose their jobs before the coronavirus pandemic ends.
Shop insurance can protect your business during the coronavirus pandemic
The COVID-19 pandemic has already resulted in thousands of dollars in losses for New Zealand retailers. Another financial burden could ruin your business beyond salvaging. This is why it’s recommended that retail store owners in New Zealand purchase Shop Insurance.
This insurance indemnifies you against natural calamities like fires, earthquakes and tornadoes, which may destroy your shop. The shop insurance also protects your store and its contents from burglary and employee liability. Additionally, if a customer were to accidentally get injured in your store, the insurance will protect you against any financial claims that may arise from the incident.
So, safeguard your business during the pandemic by purchasing shop insurance today.