Retail NZ is warning about 10,000 businesses are at risk of failing in the next 12 months as Covid-19 has returned resulting in lockdowns.
Its August survey found that 68 percent of its members reported a decline in sales since the latest lockdown.
The downturn in Auckland was more severe, with 90 percent of business reporting a drop in revenue.
Retail NZ chief executive Greg Harford said the recent outbreak of Covid-19 also knocked retail businesses' confidence about their own future.
"We've now got 13 percent of retailers saying they're not confident that their businesses will survive and another 23 percent saying that they're on a knife edge and it could go either way.
"Overall, those are pretty concerning numbers and suggest there's around 10,000 retail businesses that are at serious risk."
The proportion of businesses that were confident they would be operating in 12 months time also took a step back, falling 11 points to 64 percent.
Retail NZ's survey also showed 73 percent of retailers were struggling to import goods from overseas.
Harford said the pandemic had disrupted international shipping and there were less ships being loaded with cargo which meant it took longer to get products through foreign ports.
"The implication for retailers is that they need to be ordering further ahead and often that's challenging because retailers are needing to pay a proportion or all of the costs of those goods at time of ordering."
Harford said if retailers could not get those orders in they may struggle to get goods on the shelves.