After 27 years selling quality toys, Apple Activities closes its doors for the last time today.
Owner Di Charlton said over the last two years the Hastings business traded at a loss.
"My main customers are the older grandmothers because a lot of people are either shopping online or at the major stores, which are now big on toys," she said.
As specialist toy shops increasingly closed importers were struggling to find outlets, so were offering the same range to large retail chains.
She said her suppliers' sales representatives reported 10 specialist toy shops closed last year in the lower North Island.
The final straw for Apple Activities was a rent increase due to increased earthquake insurance premiums for the Willowpark Rd brick building.
Logan Stone director Frank Spencer said all Hawke's Bay retail areas were suffering long-term decline.
His property consultancy business has undertaken a six-monthly retail occupancy survey for Napier, Hastings, Taradale and Havelock North CBDs for 21 years.
Since 2012 Hastings retail occupancy fell 10.7 per cent, Napier 1.9 per cent, Havelock North 1 per cent and Taradale 0.2 per cent.
The February survey highlighted the continuing impact of retail chains - generally larger stores - and the clustering of stores for convenience, often on city fringes.
In the year to February Napier occupancy increased 4.3 per cent, Havelock North 3.6 per cent, Taradale had a slight decrease of 0.7 per cent while Hastings fell 5.2 per cent.
He said the Hastings decline was largely due to the relocation of Rebel Sports to a new store in The Park Mega Centre, a large format retail development that was not covered in the survey.
The Rebel Sports building has since found a new tenant.
"Boutique stores and hospitality outlets meeting the growing demand for a leisure
experience were strongly represented within the surveyed centres," Mr Spencer said.
"These activities are likely to be key to keeping the retail cores of each location vibrant."
He said Napier retailers benefited from the lack of large-format retail such as in Hastings.
Napier's figures were slightly skewed due to the amount of redevelopment taking place, with those buildings excluded from the last survey.
Mrs Charlton said she worried about the future of retail for the next generation.
"We are very lucky in Hawke's Bay to have Havelock North and Taradale, because they have small boutique shops."
She said people were no longer buying quality items with an expectation they would last many years.
"By the time my customer is first pregnant in her late 20s she has had five or six cellphones, so why would they buy a good-quality toy?"
The Apple Activities building will become a food outlet.