Divya Pahwa
Partner, National Retail Sector Leader
Retail’s recent challenges have been well-documented, with low levels of consumer confidence, high inflation and rising costs all putting pressure on the sector throughout 2024. However, our May 2025 BDO Business Wellbeing Index shows some positivity may be returning among retail business leaders.
58% of business leaders are now feeling positive about their business performance – a 6% increase on September 2024. Similarly, 60% of retail leaders expect to feel positive about business performance in six months’ time, improving 4% from our previous survey wave.
This is encouraging for a sector that has suffered through New Zealand’s weakened economy in recent years. The positivity may be partly attributed to an expected uplift in consumer confidence later in 2025 as reduced inflation and OCR cuts trickle down into potential increases in consumer spending. However, this may take time. Retail spending dipped in March 2025 after a slight rise in February and it appears cost of living pressures continue to influence spending. Cost pressures remain high for many retailers, and US trade policy announcements may soften a rebound in retail activity.
Retail business leaders are feeling less positive about business growth, workload and labour supply. With record numbers of people leaving New Zealand in the year ending November 2024, retail businesses may be struggling to attract and retain quality staff to support their workload. Ongoing financial concerns will undoubtedly be contributing to a lack of business growth, something we’ve seen reflected across all sectors in our survey. In fact, business growth is the top issue for three out of our six key sectors, highlighting the challenges many businesses have faced in pushing forward through challenging economic times.
While business sentiment has slightly improved, wellbeing is a mixed bag for retail leaders. With a record-high WHO-5 wellbeing score of 68 (the World Health Organisation’s internationally recognised wellbeing measure), retail business leaders are currently feeling better than in any previous survey wave. However, this wellbeing sentiment drops dramatically when looking to the future. Just 36% of retail business leaders expect to feel satisfied with life in six months’ time, a worrying decline from 64% in September 2024. Digging into the survey results, the expected drivers of negative wellbeing in retail leaders’ business lives include business financials, external economic factors, and not having enough people to rely on for support.
It's clear that while business leaders are doing their best to stay afloat in the challenging retail environment, this may be coming at the cost of their wellbeing. Many retailers manage small businesses, which can feel like a particularly lonely place to be. This makes it crucial for retail business leaders to put steps in place to protect their wellbeing, as well as their businesses. Seeking support – whether from fellow business owners, friends and whānau, or trusted advisers – can be the first step in helping to alleviate some of these pressures.
Divya Pahwa