Let's Get Wellington Moving has created fly-through visualisers of a plan to remove private vehicles from Courtenay Place and Lambton Quay. Video / Go Wellington
A relief package is being considered for Wellington businesses set to be impacted by upcoming Golden Mile construction following a string of recent closures.
An economist says Wellington’s suffering from an economic “triple blow” caused by high interest rates, job cuts and people working from home.
Mayor Tory Whanau believes the business environment will improve in the long term with upcoming city projects.
Financial help for struggling Wellington business owners could be on the way, with Wellington Mayor Tory Whanau considering a relief package following a string of recent closures and with more disruption looming.
Eight stores in Wellington’s CBD either closed or announced their closure last week alone, including Pandoro,which shut all three of its Wellington cafes on Friday after 28 years in business.
Others include Egmont Street Eatery, Concord restaurant, Florist Yvette Edwards and clothing stores Service Depot and Caughley. Sweet Release cafe owner Kris Bartley recently said she’d recorded the worst day of sales in her 10 years in business.
More disruption is looming for businesses in the CBD, with the Golden Mile revitalisation project set to start next year.
The project was previously part of the now-scrapped Let’s Get Wellington Moving transport plan, and covers Courtenay Place through to Willis St, Manners St and Lambton Quay.
The council’s website states it will provide a “reliable transport system that is in balance with an attractive pedestrian environment, creating a safe and beautiful heart of the city with generous spaces for people to shop, work and play by shifting the focus to public transport, walking and cycling”.
Whanau says she’s asked council officials to investigate a possible “business relief package” for those set to be impacted by the upcoming construction.
An artist's impression of proposed changes to the Golden Mile. Image / Wellington City Council
Wellington suffering from economic ‘triple blow’
Infometrics principal economist Brad Olsen said Wellington did seem to be feeling the economic pinch a bit harder than other places, and blamed a “triple blow” of factors.
“Consumers are facing those higher interest rates, which means that they’ve got less money to spend on other things, especially nice-to-haves for metro areas like Wellington.
“You’ve also got the work-from-home trend where a lot of people are staying at home during the day, not going out, particularly to bars, cafes, restaurants, as much as they used to.
“And for Wellington specifically, the triple blow is the fact that you’ve had such a big pullback in public sector spending and in contractor spending by the Government, there are just a lot fewer job opportunities out there.”
Olsen said hospitality operators were bearing the brunt of the economic challenges.
“A lot of households are having to be a lot more careful with their money and increasingly, the nice-to-haves are being cut out,” he said.
Business owners have referenced job cuts in the public sector as being partly to blame for their struggles, but Olsen said the “big four” private sector firms had also been laying off staff due to a reduction in Government spending on consultants.
The big four are PwC, Deloitte, KPMG and EY.
Infometrics principal economist Brad Olsen says hospitality is bearing the brunt of the economic challenges. Photo / Jess Wong
“Long story short, there are not all that many great job opportunities in Wellington at the moment. That means people either don’t have jobs and can’t spend or they’re worried about their jobs and might be holding on to their money in case they do lose their role in the future,” Olsen said.
A Wellington City Council economic report from earlier this year measured spending in retail and hospitality businesses between the last quarter of 2022 and the last quarter of 2023.
Wellington CBD’s retail spend was down 11%, compared to a 2% decrease for suburban centres.
Auckland CBD by comparison only dropped 3%.
The report blames an increase in people working from home, the recession and higher interest rates on mortgages.
Mayor considers financial help
Whanau told the Herald she was saddened by the recent closures. “It’s such a shame because we are losing some of our favourite businesses.”
Whanau said she “couldn’t say” if the business environment was worse in Wellington compared to elsewhere, saying she saw a number of empty storefronts on the streets of Melbourne during a recent trip.
Wellington Mayor Tory Whanau says the closures are "sad" and is working on how to support businesses. Photo / Mark Mitchell
The mayor recently established a Mayoral Business Group, made up of 10 prominent members of Wellington‘s business scene. They meet each month for one hour to discuss challenges facing the sector, and brainstorm how the council can support businesses.
Their most recent meeting discussed the idea of a “business relief package” for businesses impacted by upcoming construction on the Golden Mile redevelopment.
Council officials are now exploring the proposal, which Whanau says would be used to financially support businesses through grants to help with rent payments and marketing.
“Something that wouldn’t increase our rates, but could utilise our current budget, so that’s what we’d like to see, but it will take our officers to go away and do the work to see what’s possible” she said.
She also suggested presenting a proposal to central government for Wellington business support ahead of next year’s Budget, “like an economic stimulus package”.
“The businesses I’ve seen close, there are no cycleways near their stores,” she said.
Whanau said she doesn’t believe fewer people are driving into the CBD.
“While there’s been a reduction in parking, there are still thousands of car parks across the city... you can still come into the city, you can still find a car park.”
She believes there have been “negative campaigns” that claim the council has taken away all the car parks.
“It’s just easy to perhaps put blame on cycleways, but we have to be really honest here – mortgage repayments have increased significantly, people have been laid off in the thousands. They just can’t afford to spend at the moment.”
Council research released this month measured Eftpos spending in areas where cycleways have recently been built near shopping centres, including Thorndon Quay, Island Bay, Tinakori Road, Aro Valley, the Newtown to city bus and cycle lane project, and the Dixon Street redevelopment.
The report found most centres had experienced small periods of decline in spending following construction, but blamed that more on the general economy and people leaving the city for holidays.
“There was no pattern of negative or positive impacts of street changes on nearby retailers.”
Whanau is confident the business environment will improve, and says in the long term the capital will recover and be better than ever, pointing to projects like the Golden Mile redevelopment and the Te Ngākau Civic Square programme.
She says the city’s in a tough transition period but believes “in the next 10 years, we will finally see huge things that will bring people back to the city”.
Ethan Manera is a multimedia journalist based in Wellington. He joined NZME in 2023 and is interested in politics, local issues and the public service. Ethan is always on the lookout for a story and can be emailed at ethan.manera@nzme.co.nz or messaged on X (formerly Twitter) via the handle @ethanjmanera.
