Shoppers are expected to be hit in the pocket, with prices tipped to rise over the next three months

Retail New Zealand has released its latest Sales Index.

Chief Executive Greg Harford says around two-thirds of members expect to see prices increase over the next quarter.

He says there are significant inflationary pressures, as the cost of procurement and freight increase, and the cost of employing staff goes up.

Greg Harford says retailers operate on very thin margins, so when you have big cost increases, retailers need to pass these on.