6 Oct 2017

NZ retailers spooked by Amazon arrival

2:14 pm on 6 October 2017

Fewer retailers expect to increase sales in the coming year and they're looking nervously at the arrival of Amazon in Australia by the end of the year, a survey has found.

An Amazon warehouse in Germany.

An Amazon warehouse in Germany. Photo: AFP

Lead researcher, Professor Jonathan Elms, said those surveyed were worried they were facing a double whammy.

"Retailers were particularly concerned about the combination of Amazon's arrival and the loss of sales due to GST charges."

"Domestic retailers have to pay GST and overseas retailers don't, so there is effectively a cost disadvantage for local businesses," he said.

The issue of whether to impose GST on smaller value sales by foreign retailers had been under consideration by the outgoing National-led government.

The survey, by Massey University's Centre For Advanced Retail Studies, questioned 101 firms across the country.

It found 57 percent said they were suffering negligible losses because of the GST issue, but a fifth estimated they were losing 33 percent or more of sales.

Professor Elms said Amazon's biggest impact would be for those companies trying to compete on price.

"If you look at what has happened in overseas markets, shopping malls are struggling and department stores that compete on price have been obliterated."

But he said some local retailers might benefit from Amazon's arrival, because they would be able to sell their goods on its platform.

Retailers also voiced continuing concerns about finding and training suitable staff, particularly in buying, merchandising and digital.

Get the RNZ app

for ad-free news and current affairs