Retail Tissue in New Zealand

2021 DEVELOPMENTS

New lockdowns drive further panic-buying, placing pressure on local supply

Similar to what was seen at the onset of the initial level 4 lockdown in 2020, the further lockdown in late 2021 due to the outbreak of the Delta variant of COVID-19 saw panic-buying amongst consumers, and retail tissue was the category most significantly impacted by this. Toilet paper was the first to be reported out of stock due to consumers stocking up with large quantities, with manufacturers and retailers struggling to keep up with the surge in demand.

Ethical considerations influence consumers’ decision-making and innovation

Sustainable sourcing, recyclability and plastic-free solutions are increasingly influencing retail tissue in New Zealand, as the build-up of plastic waste is a major concern for New Zealand consumers. Consequently, packaging has come under the microscope as an area for innovation and improvement, with consumer research in 2020 showing that 78% of New Zealanders wanted toilet paper brands to use paper packaging.

Work from home trend now firmly entrenched in New Zealand

The original outbreak of COVID-19 in early 2020 resulted in workplaces across the country being forced into work from home arrangements. Subsequently, most major companies across the country have adopted permanent flexible working policies, with employees increasingly working from home, at least some of the time.

PROSPECTS AND OPPORTUNITIES

Uncertain economic outlook likely to increase consumer price sensitivity

While the New Zealand government managed to navigate its way through the COVID-19 pandemic in a way which delivered economic growth, the outlook, and the ability for the country to continue to grow over the forecast period, remains unclear. Alongside rising inflation, this has already started to negatively impact retail confidence.

Sustainability preferences likely to grow

Environmental and sustainability preferences have become firmly entrenched in the mindset of New Zealand consumers. In retail tissue, the use of recycled or sustainably sourced paper increased significantly over the review period, and is also expected to characterise new product development activity over the forecast period.

Flexible working is here to stay

While 2021 saw people return to the office, many companies took the disruption caused by the COVID-19 pandemic as an opportunity to reassess their workspace requirements, with businesses across the country looking to downsize their office footprints and promote working from home initiatives. This will promote retail growth and hamper AFH growth moving in to the forecast period.