Cheaper prices if Australian dollar parity reached
Today’s Business Day quotes Coriolis:
Australian goods, including clothing and cars will become cheaper if the New Zealand dollar reaches parity with the aussie dollar – but the effect will not be immediate…
Coriolis Research retail analyst Tim Morris said New Zealanders might pay less for clothing if parity is reached and maintained but any price changes would not flow through until at least Christmas. This is because items sold in New Zealand were likely to have been bought several months ago and the price tags were probably attached at that time too, Morris said. “The ticket prices will stay high for the time being but as the product flows through, any benefit will be passed on in sales and specials.” Morris said there was also the reality of New Zealand being a much smaller market and therefore much more expensive to do business in. “[Parity] sounds like a pot of gold. The reality of it is New Zealand is an expensive place to do business. GST is higher – it’s 15 per cent here and 10 per cent in Australia – and then you’ve got fixed costs and variable costs. Stuff is going to be cheaper in a bigger market.”