Retail vacancies in Napier's central business district have jumped 30 per cent since December, but Napier's mayor says those offering a good product and a good service will survive.
Recent figures in Turley & Co Retail Vacancy Survey showed that retail precincts recorded 20 vacancies in December 2015, but in March 2016 there were 26 vacancies.
Property analyst valuer Pat Turley said this result was counterintuitive because there was increased retail spending and considerable economic buoyancy in Hawke's Bay.
It was possible the buoyancy had not reached Napier retailers' tills before the slump following the busy Christmas holiday period, the survey showed.
He said retailers also faced wider challenges. "Other factors include nationwide large-format retail effects and internet competition," Mr Turley said.
Napier's mayor Bill Dalton said there was "no doubt" that big-box retail and the internet were having a major effect on retailing in New Zealand.
He said every provincial city in the country was "over-shopped" with some of the larger cities also suffering.
"Clearly winter is going to be tough for retailers but the good ones, offering a good product and good service, will survive."
Mr Dalton said retail was changing rapidly and the shops that were doing well were those offering goods and services that were not available on the internet.
"Shoe repairs, dry cleaners are two examples," he said.
"However, good retailers offering a good product and good service at an affordable price will continue to do well."
The survey showed other parts of Napier and Hastings also deteriorated in March compared with December.
Taradale went from five retail vacancies to six, and Havelock North from four to five.
"Hastings has performed best of the Hawke's Bay locations surveyed, with one less shop vacancy for the CBD overall since December 2016."
The December survey was marginally distorted, however, by temporary pop-up shops but the March survey also recorded pop-ups.
Hastings mayor Lawrence Yule said the gist of the survey showed it was good news for Hastings and he put it down to more positivity in the city.
"It's a very exciting time in both cities, Hastings is currently on a roll."
He said a real estate agent told him there had been more lease hold activity in the first quarter of this year than there had been in the whole of last year.
Hastings City Business Association general manager Susan McDade said the positive outcome for Hastings was based on a combination of factors.
Ms McDade said free parking Hastings had during the Christmas period was a drawcard for people.
She said the Christmas season was good and appeared to have not slowed: "We've got a tail wind behind us right now."
There had been a 42 per cent increase in Napier people coming to shop in Hastings, she said.
"There has been a concentrated effort from a number of different parties."
"We all have the same focus and that's to improve the retail environment so people want to shop there."
Ms McDade said she anticipated interest in Hastings shopping would not wane any time soon.