Five-cent phase out: many retailers will round up

Media release

Newmarket Business Association

Monday, 31 July 2006

Five-cent phase out will see many retailers round up

"The phasing out of the five cent coin during arguably the toughest time in retailing since the Asian economic crisis eight years ago will see many New Zealand retailers take the opportunity to round up their prices despite advice to the contrary," said Cameron Brewer, head of Auckland's leading retailing district, Newmarket.

"The Retailers’ Association is advising retailers to round down the likes of $9.75c to $9.70c. However I suspect given the tough climate there’ll be plenty of New Zealand retailers rounding up to $9.80c.

"Retailers are faced with a myriad of fixed costs which are growing every day. The likes of rates, the cost of loans and petrol are substantially up, but foot traffic and retail spend is down. Rounding up will be a very small way for retailers to re-coup the many increasing costs strangling them.

"The difference between rounding down to $9.70 or rounding up to $9.80 is huge when it comes to fast moving consumerable goods that operate on small margins.

"I have plenty of sympathy particularly for independent owner-operators who decide to round up not down. It's been a particularly tough winter and worse, projected economic growth out front is pretty stagnant."

Mr Brewer said recent Statistics New Zealand figures show that retail across the country has flattened out for the first time since mid-1998.

ENDS

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