City centre construction, online shopping and expanding malls are putting additional pressure on Tauranga's small businesses and failure to adapt could mean they are "left behind", experts say.

Tauranga's business leaders say smaller retail businesses were expected to adapt or risk being left behind as the city transitioned into more of a "commercial centre".

More than $350 million in commercial construction was under way or planned for the city centre alone this year, and more than $250m to redevelop Bayfair Shopping Centre, Tauranga Crossing and Papamoa Plaza will create upwards of 3200 jobs on completion.

However, Tauranga Chamber of Commerce chief Stan Gregec said some small businesses in the CBD and places including Greerton were feeling the pressure of disruption from construction and road works.


Some businesses were also being affected by online shopping and the growth of Tauranga's shopping malls.

"If you're not constantly adapting, thinking of your customer and trying new things, you are in danger of being left behind."

Gregec said there had been an "explosion" of home-based businesses in recent years, many of which were operating in "new, smarter ways" rather than having a physical presence in the city.

"Small businesses will always have it tough when competing with big business in high volume, low-margin products and services," he said.

"But they come into their own when they focus on uniqueness and service."

Priority One chief executive Nigel Tutt said employment in the CBD had increased in the last few years.

"We are seeing a transition to it being more of a commercial centre - and, as of next week, more of an environment for students," he said.

"We expect that the retail businesses in the CBD will adapt to those changes."


Mainstreet organisation Downtown Tauranga's chairman, Brian Berry, said the CBD was going through a transition phase as buildings were earthquake-strengthened and sites redeveloped.

"The retail offering in the CBD needs to transition to niche/specialty shops that are not competing with offerings in the large footprint shopping centres," he said.

Berry said parking remained an issue in the CBD which could put off potential shoppers and occupancy costs were generally higher than non-CBD properties.

However, the CBD was about to have an injection of up to 1000 students and staff with the opening of the new University of Waikato campus on Durham St.

Steve Smith from EmbroidMe in First Ave said the company would celebrate its one-year anniversary on March 12.

Smith said he decided to buy the business as he wanted a change of job and to work closer to home. He previous sales manager role covered most of the North Island.

The Pāpāmoa father-of-two also wanted more work-life balance so he could spend more time with his young family.

"We decided it was a good fit," he said. "There is lots of opportunity in Tauranga with the growth of the area."

Smith said it was challenging starting out as a new business in Tauranga trying to network and advertise the new business.

"For the first few months I was out there knocking on people's doors and dropping business cards," he said. "The challenge is motivation to get out there and talk to people."

However, Smith said Tauranga was "very connected and well-networked".

Tauranga Crossing chief executive Steve Lewis said their research suggested the local economy was capable of supporting more retailers, both big and small.

"Retailers decide where to locate their businesses and at Tauranga Crossing we will have a mix of big and small operators, international, national and local retailers, including mum and dad business," he said.

Lewis said online retailing was used by big and small retailers.

"It is relatively easy for a small mum and dad retailer to sell their products online."



• $39m University of Waikato tertiary and research campus

• $39m central library in civic campus on Willow St

• $30m Latitude Apartments at 6 Cliff Rd

• $23m Tauranga City Council administration building

• $20m refurbishment of Bay of Plenty Council's Regional House on Elizabeth St

• $6m upgrade of Durham St / Durham Lane

• $5.7m Quest serviced apartments on Devonport Rd

• $50m Craigs Investment Partners House at 2 Devonport Rd, including retail and apartments
• $24m Harington St transport hub/car and bike park

• $130m redevelopment of Farmers site with retail, townhouses, apartments and eateries

Source: Priority One