Smithfield meatworks closure already impacting local economy

The loss of 600 jobs in Timaru is hitting the local economy hard with retailers seeing a big drop in sales and fearing more shops will close.

Alliance's Smithfield meat processing plant in Timaru confirmed its closure this month, leaving hundreds of people out of work during an already tough economic time.

Glen Patterson leads the Timaru CBD Group, and owns a jewelery store on the main street. He told RNZ there's been an instant reaction to the news.

"It's definitely been a shock to the system, we were starting to come up on the vibrancy of the town, but they announced the closure of the Smithfield plant and the spending stopped," he said.

Timaru's main street has 42 vacant shops, and he fears that number could grow.

"There are going to be some casualities along the way, but we just have to stay as positive as we can," Patterson said.

Down the street Millie Rose owns a boutique cupcake, gift and clothing store. She has seen retail spending plummet in the past six months by up to 50 percent, and worries the Smithfield closure will make it worse.

"I feel the past couple of weeks business has been slower... It's a real negative thing to happen to the town," she said.

Mille Rose is finding it tough being a small retailer in Timaru.

"It's hard. I think retail has been suffering for everyone in New Zealand," she said.

Retail worker Lisa Mclachlan has also noticed how quiet the town is since the meatworks closed.

"There's not many people around shopping, it's making it hard for busineses to stay open. Lots of people are closing or reducing their hours..

"They don't have the staff, they can't afford it or they don't have the customer base because people are shopping online or not at all," she said.

Even before the meatworks closed, Timaru's economy was slipping. In the year to June economic activity had fallen 1.3 percent, a much larger hit than the national decline of 0.2 percent.

That economic picture could worsen as redundancy payments run out and people are forced to leave the area in search of work elsewhere.

Menswear store manager Warren Park believes the true impact of the Smithfield closure is yet to emerge.

"It's early days we haven't truly felt the fall out yet but we are nervously waiting. It's really concerning," he said.

That nervous aprehension of what is to come is being felt throughout Timaru, with the Christmas shopping mood that is expected this time of year yet to arrive.

"We haven't got that feeling yet, hopefully I will get that feeling.... a lot of the stock has been committed to - it's here now so the decision is to continue trading as well as we can coming into Christmas," Park said.

"It's just a real concern.. we have empty shops now and I'd hate to see more empty shops."

However, mayor Nigel Bowen is determined to remain positive.

"I'm confident we can come out of this.. we just need to work hard," he said.

Although he is also realistic that an 'economic blip' is likely, but the extent of it is unknown.

"So you're talking about 50 million dollars of direct wages, then about 90 to 100 million of economic activity in and around that... so it is massive and it's an economy of about 3.36 billion so still significant," he said.

But he is promising that his council is doing all it can to help those hundreds of workers find employment.

"We've had a taskforce certainly focused on industry supporting jobs and the health and wellbeing of individuals," Bowen said.