Niche retailers trading well despite downturn

DEAN KOZANIC/The Press

Footing it: Suckling's Shoe Store owner John Suckling is enjoying good trading in Christchurch, despite the economic downturn.

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Small independent retailers need to carve out a niche to survive in the tough economy, New Zealand Retailers' Association spokesman Barry Hellberg says.

Retailers across New Zealand are being hurt by a downturn in consumer spending.

Listed chains such as Briscoe Group and The Warehouse Group have revised their profit forecasts downwards, but an increasing number of vacant store fronts in Christchurch could also suggest smaller independent retailers are struggling.

There had been an increasing number of small retailers contacting the association for advice on redundancy issues, Hellberg said.

A Statistics New Zealand employment survey, released this week, backed this up, with the number of full-time equivalent jobs in retail dropping 4.4 per cent for the June 2008 year.

Hellberg said the market was tight and trading conditions were not easy, but some businesses who were concentrating on their niche and not trying to compete with the chain stores on price were "doing OK".

He said it was important independent retailers looked at their product mix and cost structures and promoted why their product was superior to that of the bigger companies.

Munns The Man's Store co-owner Barry Souter said it was a challenging environment but there were still people out there shopping every day.

The key was to listen to your customers to find out what they wanted and give it to them, Souter said.

Sucklings Shoe Store owner John Suckling said the business was doing better than last year, driven by a more disciplined approach.

However, the business was not affected by the same extreme highs and lows experienced by other retailers selling big ticket items.

Sucklings Shoe Store has been around since 1934 and has become a destination store specialising in a wide range of dress shoes, wider than anyone else, Suckling said.

The key to surviving in the current market was to remain focused and to be acutely aware of who your customers were, he said.

Hellberg said small retailers faced increasing rentals at a time when turnover was not increasing and staff costs were rising.

He encouraged retailers to talk to their landlords and argue why a reduced rental was necessary.

"It's far better to have a tenant, I would have thought, on a lower rental than have an empty shop where you're getting no rental at all," Hellberg said.