Shipping troubles and regional restrictions provoke concern about the upcoming Christmas and New Year shopping season
One of the busiest trading times of the year is turning out to be quite a nerve wracking time for businesses.
Auckland-based apparel wholesaler Chris Brittain, who owns Brittain Wynyard, says while the easing of restrictions for retail in Auckland at Level 3.2 will help move stock around as delivery drivers free up from fulfilling online shopping orders, the bigger concern for traders is access to stock.
Factory closures in Vietnam because of lockdown measures, along with shipping lines directing boats on more profitable routes and container prices increasing five-fold, have created a perfect storm.
“It will take a while for it to settle down and come back to some sort of normality. With Vietnam factories being closed for two months [that] means there's a big hole in supply over the next few months for a lot of companies,” Brittain warns.
“If you’ve got a boat load of sandals coming, you want to sell them in summer.”
A survey of 500 small- and medium-sized businesses by MYOB reveals just above half have made changes to their business this year in an effort to prepare for and manage future Covid disruptions. The main priority has been to get stock, with around 41 percent having ordered stock earlier to avoid delays.
MYOB customer service head Jo Tozer says with uncertainty around restrictions easing and the resuming of travel, businesses are taking a more conservative approach to carrying additional stock.
“Those ordering stock in advance are likely doing so to try and avoid potential supply chain issues and delays at the border which make it harder to order material or to have products arrive in time for the Christmas break,” Tozer says.
“SMEs not taking this action will be waiting for more definitive timeframes on when their operations can return to a semblance of normal so they can anticipate demand more accurately, or ... get through the stock they’re currently sitting on, before they make new orders.”
But the survey also reveals 80 percent of businesses are concerned about the resurgence of Delta over the Christmas and New Year period, with more than a third extremely concerned about Delta dampening business.
"Those of us in business all feel the same – we need a timeframe. The lack of information about what’s going to happen is affecting us all at the moment." – Nadia Nazaryeva, Matisse Wine Bar
Tozer says businesses, especially those in Auckland, will have to deal with many new ways of trading this holiday period.
“New Zealand businesses will have to contend with the Delta variant continuing to spread, a change from the current alert levels to a new traffic light system, the potential introduction of vaccine passports, as well as some vaccine mandates for frontline staff, and a global supply chain that is looking increasingly fractured,” Tozer says.
“With timing still uncertain around many of these factors, all of this makes for an extremely uncertain picture, as many businesses work hard to prepare for what is traditionally a vital trading time for many SMEs.”
Every week hospitality remains shut, including at Auckland's Level 3.2, restaurants are burning through cash reserves.
Owners of fine food supplier Sabato, Jacqui and Phil Dixon, say they've faced many shipping challenges over the pandemic as the majority of their products are imported from Italy, Spain and France.
The business has had to be flexible all across with staff working beyond their usual roles to help support where they can.
With Christmas being their busiest time of year, they are counting on hospitality being able to open their doors soon.
Meanwhile in Napier, Matisse Wine Bar owner Nadia Nazaryeva says the summer trading period for her hospitality business will be heavily dependent on regional travel restrictions being lifted.
In Level 1, Aucklanders made up about a third of her customer base, a significant revenue stream the Delta outbreak has plugged.
Nazaryeva says uncertainty has also made it difficult to accept bookings for Christmas and New Year's Eve.
With the summer the busiest time for inter-regional travel to Hawkes Bay, particularly with events such as Food & Wine Classic and Art Deco Festival, December to February are critical trading months for businesses like Matisse.
Nazaryeva says shipping delays have meant some wine has arrived up to two-three months later than expected. All she can do she says is manage the business week by week – “sitting on the fence” but preparing to be flexible.
“Those of us in business all feel the same – we need a timeframe. The lack of information about what’s going to happen is affecting us all at the moment,” Nazaryeva says.
