Sunny's Variety Stores are in a major expansion phase with a shop opening soon in downtown Tauranga and a replacement Mount Maunganui store due to open in November.

The addition of the store to the downtown area has been welcomed by other businesses, who see it as a sign of renewed confidence in the area.

Owner Mark Pepers has taken over the lease of the former City Markets site on the corner of Willow St and Hamilton St, and was busy filling the shelves in anticipation of a gala opening on Saturday, May 14.

The landmark yellow store in the Mount Shopping Centre will reopen as the cornerstone tenant of the new Mount Central shopping, restaurant and cafe development on the same site.

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Mr Pepers opened a Sunny's store in Katikati last year and once the current expansion phase was completed, his three stores in the Western Bay would employ a seasonal peak of 35 staff.

He planned a soft opening of the Willow St store next week to make sure systems were working properly, prior to the grand opening that will include a sausage sizzle and face painting.

"I found it really difficult to find a site that I thought would work in Tauranga."

Mr Pepers said shopping was so spread out, with lots of little malls and shopping centres. The clincher for Willow St was the "fantastic" on-site parking, and proximity of large office buildings, bus stops and waterfront eateries.

Opening the downtown store allowed him to retain his "very good and loyal" Mount staff until the new store opened in November and also kept the the brand's presence going in Tauranga for the seven months. "A lot of customers were a bit upset because they thought we were leaving completely."

He said the city store was not a stop-gap measure and a lot of work had gone into finding the right site.

There would be a small change in the variety of stock in the new store, with fewer souvenirs and a much larger stock of dress-up party costumes and party supplies.

"We don't have the cruise ships on our doorstep." However the basic product range would stay the same between the Mount and city shops.

"We are very family-oriented stores. A large part of our customer base are local mums and kids and retirees."

His brother Rob owns the Whangamata store and runs the company's head office in Auckland, with three other North Island stores in the franchise.

House of Travel owner Shane Kennedy said the addition of Sunny's to the city centre was great news because no store would move into the area without doing due diligence and coming to the decision it was a worthwhile investment.

"To me it show a renewed confidence in the CBD," he said. "They might be something that actually brings people into the CBD on the weekends. From the House of Travel point of view it's great to have them in the city."

Books A Plenty co-owner Chris Baskett agreed.

"I think any business is good business," she said. "We can't turn down any shop. It's nice to have such a diverse range in town."

She had already noticed more people in the area and hoped another store would only bring more shoppers.