Managing your retail project budget in 2025: Clarify, Protect, Localize.

It’s no secret across the market that new store budgets have never been tighter. This year, retailers are up against steep pressure to narrow down costs. So let’s look at how you can get the most out of your CAPEX budget here in New Zealand and Australia.

 Here are the three strategic phases we take our clients through when we start mapping out their project budget.

Phase 1: Clarify. Get clear about your ROI as you set your budget.

Every store is a commercial investment, so it’s essential to consider how long it will take your profits to surpass your project costs. The lower the budget, the faster the return.

It’s about finding the right balance between streamlining your investment upfront and ensuring it's a realistic figure for getting the long-term results you want for your store. You’re looking for the best possible outcomes for the lowest possible investment – which can be incredibly hard to predict, especially if you’re entering a new market or location.

That’s why we encourage retailers to talk to us at Retail Connection right from the start of the budget planning process, as we can offer the most accurate ballpark figures for a range of project outcomes.

Phase 2: Protect. Secure that budget by avoiding common traps.

Deciding to move forward with a streamlined budget is all well and good, but it means very little if you can’t stick to it. Here are the most common ways that retailers end up going over-budget:

Delays.

Whether it’s due to a supply chain disruption, a miscommunication, or tricky negotiations for council consent, delays are a sure-fire way to eat up budget.

Botched “shortcuts.”

Sometimes to reduce spending, retailers end up spending more. It might mean going with a designer that doesn’t align with your goals or cutting out certain details that derail other aspects of the project. The best fix for this is to get expert advice on which elements can be streamlined, and which ones will cause more hassle than they’re worth.

Unexpected revisions.

This often happens when a contractor or supplier quote isn’t fully understood from the start. It’s incredibly common for retailers to assume that pieces are included in the quoted price when they aren’t – such as installation or freight costs, the price of a specific fixture or fitting, or incorrect quantities. Even builders making incorrect assumptions on a project can create surprise variations.

So how can you avoid these all-too-common budget traps? That brings us to…

Phase 3: Localize. Leverage local support to find the best opportunities for cost efficiency.

Ultimately, you need to lean on well-established industry experts to spot the best strategies for cutting costs. Every market is different – from what kind of decisions will impact the consent process, to what supplies will be too expensive to source, to what you can expect from local contractors.

For example, when working with one of our longtime retailer partners, Mountain Warehouse, we decided we needed to source a different solution for their wallpaper. Rather than shipping it all the way from the UK, where the brand is based, we set up a more cost-effective alternative with a local supplier. The result for the fit-out was the same, but it had a huge impact on their overall spend.

Now, imagine that level of detail across every element of a store project. That’s where brands really start to see meaningful savings reflected in their CAPEX budget. Every project comes with unique chances to make small changes to the design, the brand of fixtures, or even the consent plan that present far better budget outcomes for the project. But without experienced, local guidance on where to look for these changes, it’s hard to spot them. And that’s where leveraging support from a project specialist makes a world of difference.

If you take away one piece of advice as you consider your retail budgets this year, let it be this: By getting outside expertise, you got more out of your CAPEX budget – and all without sacrificing time and effort from your already-busy internal staff.

Budget strategy for New Zealand and Australia retailers is what we do best. If you’re looking for local support, simply get in touch with me and the team: enquiry@retailconnection.co.nz