7 Aug 2022

Retail leaders confident despite warning of potential supply chain issues

5:10 pm on 7 August 2022

Leaders in the retail sector are confident businesses can handle supply chain disruption over the coming months.

shipping containers

Photo: Unsplash / Aron Yigin

A recent study predicts a number of factors could affect the stability of New Zealand's supply chain over the upcoming northern hemisphere winter, when New Zealand's export season hits its peak.

Massey University's Supply Chain Risk Analytics Network said the war in Ukraine and winter energy demands could mean a continued rise in costs and disruptions.

In addition, lockdowns enforced by China's zero-Covid-19 policy have caused manufacturing delays and congestion at ports. With winter on the way, it was likely similar lockdowns may be more frequent and widespread, causing significant uncertainties to supply chains here, a statement from Massey said.

But Retail NZ cheif executive Greg Harford said retailers were better prepared in ensuring they have adequate stock, compared to the previous two years.

"Businesses have been working really hard to make sure they have got more stock available to them and to be looking at alternative ways for filling their supply chains.

"I'm reasonably confident people are doing what they can to avoid a repeat of the situation we've seen through Covid."

Harford said the sector had learned to be more adaptable during Covid-19.

Although he admitted global factors could yet have an impact, Harford was not anticpating many significant issues over Christmas.

Massey University senior lecturer in supply chain management Dr Carel Bezuidenhout said supply chains generally remained stretched due to sluggish shipping, tight finance, and overworked staff.

"This means small disturbances can still cause large disruptions," Bezuinhout said.

"Unfortunately for us, these additional challenges are likely to come during New Zealand's peak exporting period over our summer and autumn."

Bezuinhoust said it business owners reliant on supply chains should prepare for disruptions by undertaking risk assessments and anticipating which of partners may be affected.