Downtown retailers say they are yet to see a surge in trade - despite latest Paymark figures showing an increase in spending across the Bay.

Bay of Plenty figures show shoppers spent more than $336 million in December, up 7.5 per cent on the same period last year.

However, Fancy That Gift and Souvenir Shop manager Bill Campbell said some downtown shops were struggling and the lack of free parking remained an issue.

"The main street shops have struggled, there is a lack of foot traffic and a real need for free parking in the city. People [would] rather go to the Mount and not have to pay for parking.


"If we had the right number of people coming into the CBD it would be fine.

"We have got four empty shops in the Red Square," he said.

When you get that number of empty shops, it can't be bad customer service, something else has to be wrong, he said.

The new Paymark figures contradicted what he was seeing on the streets but he noted it was probably due to more shoppers heading to malls.

His comments come after one of Tauranga's most established gift stores, Limelight, which had graced the CBD for more than 20 years, shut its doors.

According to the companies register the company had been in liquidation since January 3 this year.

The closure comes after an initial move from Spring St to Willow St, in Tauranga central.

Tauranga Mayor Stuart Crosby said he was surprised at the store's closure as he often shopped there himself but parking was often used as an excuse for retailers' issues.

"People can park for 10-15 minutes for free."

Competition from malls was compounding the problem, he said, but most of the retailers he had spoken to had a great summer.

"We need to assess each retailer on their own."

Carters Photographics store worker Terry Brunton said he had worked in the CBD for a number of years and said malls had an impact on foot traffic.

"The Red Square has died. Even now, there aren't many people," he said.

However, he had not noticed a lack of foot traffic in their store over the past six months.

Originally on Devonport Rd, Carters Photographic moved to Grey St.

"We should have moved earlier," he said.

"We have more business on Grey St, there is better parking with the parking building straight across the road."