Dozens of empty shop fronts on one stretch of Wellington road as sales 'drop right off'

Maggie Lu

It is prime Wellington real estate, but 46 empty shop fronts sit between Lambton Quay and Courtenay Place.

And there are fears that number could rise, with retailers reporting falling sales, tight margins, and reduced profits.

The increase in people working from home after the pandemic and the thousands of public service jobs axed by the coalition government mean that fewer people are in central Wellington on weekdays.

Ian Douglas, the owner of Village Goldsmith, a jewellery store on Victoria Street, said there was no doubt the retail environment was challenging - not just in the capital, but around the country too.

However, he considered himself more fortunate than most: He owned the shop outright and it had been an established business in Wellington since 1981.

"We create our pieces, not to a price point, but we designed them to be objects that that last, and I think in this current kind of economic environment where obviously everyone is watching their dollars, people search out items with more meaning," he said.

Still, Douglas said he had noticed a change in spending behaviour.

"A lot of people will - in better times - and when they are feeling safe and secure about their jobs and their income and interest rates are low, they will treat themselves. They'll buy themselves a little something that makes them feel good, or to wear with another outfit, something like that," he said.

"Those kinds of sales have dropped right off."

Business Central chief executive Simon Arcus said businesses needed to listen to their customers in these tough economic times.

"If consumer behaviours change, they have to try to adapt to it," he said.

"I also think that retailers need to try to orient to what the customer wants by looking at trends - they have good relationships, they understand the way that customers work, but it is difficult, it is very challenging, and I think we will see this kind of issue, even in a good economy."

Pickle & Pie café and Dough Bakery owner Tim Tracey said that was what had been working at his businesses.

"We're finding, by talking to our customers, that more people are coming out just for simple coffee and light treat offerings instead of full meals," he said.

"And we're also finding our customers are working a lot from home, so we've opened stores closer to where they live out in the suburbs, including Ngaio and Upper Hutt."

Mike Ny, the director of Glou Glou café on Allen Street, said he had also adopted a new strategy.

"That was to relaunch a new menu, showcase our staff, showcase our venue in the hopes to kind of show that there is still some vibrancy and some liveliness and hospitality left," he said.

"Basically, just trying our best to stay on the forefront of everyone's minds, pushing sales more, making sure that we're not letting the environment take over us, but actually continue to just keep doing what we're doing and just waiting for the return of the market."

With the latest Stats NZ data showing the economy has edged out of recession, businesses are hoping for an uptick in sales over the coming months.