Kiwis are having to plan much further ahead for Christmas as Covid-related shipping disruption changes how we shop
Sarah Colcord may be locked down in Auckland, but her website promoting small businesses has been busier than ever.
Sales through the website she created last year to encourage shopping locally have doubled this month as delay warnings triggered early Christmas shopping.
The majority of orders are from Aucklanders in lockdown, she says.
“People are shopping a lot earlier than last year. We saw sales pick up in November last year, but certainly not as early as October.”
She says businesses have also brought forward their Christmas shopping cut-off dates to November instead of December, which has led to many of the 3000 retailers selling through her website already running out of stock.
Colcord started Chooice following the success of the New Zealand Made Products Facebook page she started last year. The Facebook page, which has been renamed to Chooice has 500,000 members, making it New Zealand’s largest group on the social media website, with more than 30,000 businesses promoting and selling their locally-made goods.
In recent weeks there have been hundreds of posts a day from members seeking locally-made alternatives to products that have sold out at big retail chain stores, Colcord says.
“People are actively making an effort to try and supplement what they usually would get from a larger store by trying to source it from the small businesses.”
The most popular items by far were homewares, Colcord says.
Wellington Chocolate Company general manager Matt Williams is also preparing for an early and busy Christmas shopping period.
“It’s very hard to disappoint with chocolate as a gift, so this is always a busy time for us.”
Last year selling the small company had a huge boost in sales thanks to a pop-up store joint initiative by WellingtonNZ, Wellington City Council and First Retail. And this year Williams was looking to replicate that success by opening a similar pop-up store next week.
“We’re opening a month earlier than what we had in place last year because we’re definitely expecting sales to overtake last year.
“There’s a lot of congestion leading to delays at the moment so we’re expecting this will increase getting closer to Christmas.”
“The reality is, there’s just a whole lot of supply demand mismatch all around the planet at the moment. I see this going on for at least a year.”
– David Robb, University of Auckland
While demand was strong, Covid-related shipping problems had somewhat hampered Wellington Chocolate Company’s growth plans.
“Some of our suppliers have had their own delays too so it’s just the flow-on effect. But the pressure point for us is more around equipment getting here in time.
“These are some of the challenges we’re going to be dealing with.”
University of Auckland operations and supply chain management professor David Robb says the supply chain disruption that surfaced about 12 months ago thanks to Covid has worsened this year.
Robb says the issue with supply chain problems for small Kiwi businesses is that most local manufacturers import their materials and equipment.
He says lockdowns, congestion at ports and the bullwhip effect, where you get oscillations of stock having run out, followed by a whole lot more coming in has caused havoc in supply chain plans.
Energy problems in China have also contributed to the “perfect storm” disrupting shipping.
“We don’t have any ships waiting, because they are bypassing Auckland. We still can’t book berths out of Auckland.”
And things aren’t likely to change for some time.
“The reality is, there’s just a whole lot of supply demand mismatch all around the planet at the moment. I see this going on for at least a year,” Robb says.
But in the medium to long term, Robb believes manufacturing is likely to come back to New Zealand.
First Retail Group managing director Chris Wilkinson says Covid caused “epic disruption” to Christmas shopping trends on both the consumer and retailer ends.
“We’re starting to see lots of empty shelves and products out of stock online. The Christmas shopping period is well underway.”
On the consumer front, Covid had fast forwarded the Christmas shopping season to early October rather than the typical kick-off with Black Friday and Cyber Monday sales at the end of October.
And on the retailers’ side, ongoing supply chain issues meant many businesses may struggle to have big discounts usually expected around this time.
“Yes we’ll see sales this year, but they won’t be as dramatic because retailers are really facing extra freight costs, operational costs and limitations on stock,” Wilkinson says.
Consumer NZ spokeswoman Gemma Rasmussen warns although customers should expect to pay a bit more than usual, they should shop around to ensure retailers are not unreasonably hiking up prices.
And if shoppers were buying from overseas, she suggests having a contingency plan with a local back-up.
“If you are thinking about buying something from overseas, make sure that you give yourself ample lead time, get in touch with the retailer to ensure that they actually have what they say on the website as what they have stocked.”
Last year the Commerce Commission warned retail chain Noel Leeming for selling products that it did not have in stock.
Rasmussen says companies have an obligation to have things in stock if they are accepting payment for it.
“Companies need to be very careful. If you are purchasing something, and it says that it’s in stock, and then you’re getting hit with delays and things like that, you’re within your rights to ask for a refund.”
Rasmussen says the silver lining of the situation may be that consumers take a more conscientious approach when gifting.
“Supporting the local retail community is a nice way to give back to the economy. But maybe consider an alternative approach to Christmas gifting and shopping. You could look to donate, buy a tree for someone else or give to a food bank that are really in need at Christmas time and that’s a great way to give back.”
