Optimism in Hawke's Bay despite less spending

By Lawrence Gullery, Teuila Fuatai

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Retail sales figures show shoppers are spending less, especially in Napier where sales are down 39 per cent year on year, but there is optimism people will have their wallets open heading into the Christmas season.

Figures released by Statistics New Zealand showed total retail sales were down in the Hawke's Bay in the three months to September 30.

In the breakdown, shoppers spent 2.1 per cent less at Wairoa, Hastings and Central Hawke's Bay retailers, compared to the previous June quarter. Napier city sales declined by 5 per cent between the two quarters.

A year-on-year comparison from the Quarterly Retail Trade Survey revealed a huge drop in sales for Napier city, with total sales down 39 per cent, or about $122 million, between the September 2012 and 2011 quarters.

Sales for Wairoa, Hastings and Central Hawke's Bay fell 5.2 per cent year-on-year.

Napier City councillor and business owner Tony Jeffery said he did not believe the 39 per cent drop was a fair reflection of retailing in the Art Deco city.

"It is definitely quiet coming off the back of the Rugby World Cup but not 39 per cent; I would be very surprised if those statistics were correct. In October we were up on the same month last year."

Mr Jeffery manages family business Jeffery's Fashion for Men on Emerson St, which was founded in 1860.

"If you look at the city about a decade ago there were a lot of empty buildings but these days it's pretty full. Occupancy rates are a good indication of how the sector is performing.

"We had substantial rental hikes during the boom and people are still hanging in there but I don't think the situation is as bad as the figures suggest."

Mr Jeffery said Napier City Council was investing heavily to improve the CBD and retail, especially business around its key tourism sector.

That included street upgrades for the CBD and the planned redevelopment of Marine Parade - the major project which would propel the city forward.

Retailers optimistic for Christmas boost

Total value of retail sales

Wairoa, Hastings and Central Hawke's Bay districts

September 2012 quarter: $282.5m

September 2011 quarter: $297.9m

Down 5.2 per cent

Napier city

September 2012 quarter: $195.9m

September 2011 quarter: $318.8m

Down 39 per cent

Source: Statistics NZEditorial, p6 Napier's Music Machine owner Richard Jackman said he thought the figures "were about right" as it had been one of the most difficult winters to trade through in his 20 years in retail.

"The whole of winter was hard going. Literally from July through to September it was hard work. I'm always trying to be optimistic and I will say that October seems to have been a little bit better and we are looking forward to a lift in summer."

Hastings City Business Association acting chairwoman Sandra Hazlehurst said retailers were being encouraged to use new shopping technology to boost sales.

"The way people shop is changing with more and more people shopping online and often purchasing goods offshore.

"The challenge is for our retailers to embrace this change and run websites with electronic payment gateways for those who wish to shop online," she said.

Ms Hazlehurst said that with Christmas on the way, and a large number of events planned in Hawke's Bay this summer, the region was likely to see an increase in visitors which in turn would benefit the retail sector.

"The general feeling from retailers is cautious optimism for Christmas trade."

Hastings retailer Darren Olsen took over Alexander's Menswear almost a year ago and said poor weather and a flat economy were two of the factors for the city's less than desirable retail figures.

"I wasn't here for the 2011 September quarter so I can't compare the two. But I think in clothing retail, the summer weather brings a lot more customers out for sales. Sometimes the town is really dead but then on nice days, like today, things are looking a bit more active around the place.

"We do get a few customers from Napier and Taradale but the bulk are from Hastings and Havelock North.

"I'm new to retail and this is my first year, so next year I will have a full set of figures to compare trade."

Nationally, seasonally-adjusted retail sales dipped 0.8 per cent since the June quarter.

This was led by New Zealand's three largest retail industries: supermarket and grocery sales dipped 1.6 per cent, motor-vehicles and parts sales dropped 1.8 per cent and fuel retailing was down 1.9 per cent.

Business NZ chief executive Phil O'Reilly said the decline was relatively minor.

"It's not bad especially as the New Zealand economy faces really significant headwinds."

The weak performance of the manufacturing sector combined with the preference for many "mums and dads" to pay off debt at the moment could have caused a much larger downturn, he said.

"The fact that you've seen really quite a moderate downturn in retail is actually quite an impressive performance."

A strong September month for the service industry may have offset the drop in sales, Mr O'Reilly suggested.

Christmas shoppers were also expected to boost sales in the coming months, he said.

Statistics NZ industry and labour statistics manager Blair Cardno said shoppers spent less in more than half of the retail industries during the September quarter.

"The only industry we saw them spending significantly more in was hardware, building and garden supplies, which was lifted by higher sales in the Canterbury region." Sales volumes in this industry rose 4.2 per cent.

While retails sales were down from the growth period of 2011, total sales were up during the last quarter year-on-year.

"Retail sales volumes remains 2.6 per cent higher than a year ago, when the Rugby World Cup was on," ASB economist Daniel Smith said.

"We expect moderate growth in spending to continue."

Mr Smith said the decline in supermarket sales would ease in the coming months.

"Other sectors were patchy, but we see no fundamental reason for the weakness in supermarket sales - the prime driver of the weak overall result - to continue in coming quarters."APNZ

- HAWKES BAY TODAY

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