Retail and hospitality closures on the increase, but industry optimistic about future

Saturday, 7 June 2025

The number of retail and hospitality businesses closing has been on the rise.

Closures have been on the up year by year since 2021, while openings have been tracking downwards.

Despite this, there are still more hospitality and retail businesses being opened than closed in New Zealand.

The number of retail and hospitality businesses closing their doors has been increasing year on year since 2021, but there are still more businesses opening than closing, new data has revealed.

Numbers released to Stuff by MBIE (Ministry of Business, Innovation & Employment), show that in 2021, there were 1614 business closures in the hospitality sector. This jumped to 2370 closures in 2024.

Likewise, in retail, there were 2704 business closures in 2021, a figure that nearly doubled, to 4167 closures, in 2024.

During the same period, the number of retail businesses opening year by year has been on the decline, dropping from 5721 in 2021 to 4668 in 2024.

Hospitality business openings, though, have remained steady. They have increased slightly in the last three years, with 2946 openings in 2021 rising to 3450 in 2024.

This comes amidst a wave of publicised closures in both sectors over the last year, including many long-running and popular eateries and stores.

Just some of the businesses to have closed or announce closures include Smith & Caughey’s, SPQR, Homeland, and Bordeaux Bakery.

Many of these closures have been in Wellington and Auckland. However, the numbers paint a mixed picture of the reality of the situation in the two cities.

In Auckland, the number of retail businesses opening each year has slightly declined since 2021, dropping from 2856 in that year to 2375 in 2024. However, closures have been increasing year by year during that period, rising from 1382 in 2021 to 2063 in 2024.

Wellington, on the other hand, has also seen a decrease in retail business openings over the last four years, going from 447 in 2021 to 346 in 2024. Closures, like those in Auckland, have been trending upward, increasing from 213 to 318 during that period.

As for hospitality, the trend appears to be bucking what some headlines have been suggesting.

Auckland hospitality business openings have been steady over the last two years, around the 1500 mark per year, while Wellington has even seen an increase in businesses opening each year since 2022, with 217 opening that year and 278 in 2024.

These numbers have been offset, however, by an increase in closures in the two cities, especially in the last two years, with Auckland seeing closures rise from 762 to 989 between 2023 and 2024 and Wellington from 146 to 205 in the same period.

Despite closures trending upwards and openings trending downwards, overall, there are still more businesses being opened in retail and hospitality than there are being closed in New Zealand.

Since 2021, the number of retail businesses that have opened is 19,928, while those that have closed are 13572.

Hospitality, in that time, has seen 12,704 business openings compared with 7532 closures.

Reaction to these numbers has been mixed, with both retail and hospitality insiders offering differing views to the reality on the ground.

Retail NZ Chief Executive Carolyn Young says the statistics are not surprising and that retail has been “very tough” for the last few years due to inflation and the cost of living.

“Our own surveys of members have consistently shown that many retailers are not meeting their sales targets and many are concerned about the survival of their businesses.”

Young told Stuff that although there may be some relief from lower interest rates “putting more money in consumers’ pockets”, low consumer confidence continues to rein in spending.

There were a few reasons to be optimistic, however.

“Some regions are doing better economically and this helps to support new and growing businesses. Online sales are also growing and we know many retailers are taking advantage of that to find new customers,” Young said.

This optimism was shared by the Chief Executive of Hospitality NZ Steve Armitage, who told Stuff the sector remains confident about the future despite some recent “headwinds”.

“This doesn’t mean that trading is easy – business remains volatile and variable up and down the country – but the fact that we are seeing growth in spite of the headwinds absolutely gives us confidence for the future.”

He said operators have been “more positive” about their own business outlook than the economic climate as a whole and that most continue to invest in their business.

“As we continue to see the OCR drop, and cashflow for households improve, all signs point towards an encouraging direction of travel for hospitality.”

Such industry sentiment has previously been backed up by business owners as well, with some Wellington restaurateurs telling Stuff that the capital’s hospitality sector has not been in the dire state some have made it out to be.

“Things ebb and flow and trends change,” Victoria McDowall, who owns Cuba Street businesses The Ram and Fred’s Sandwiches said last month. “Businesses have closed, but there is regeneration as well.”

Hayden McMillan, who co-owns two restaurants - Floriditas and Loretta - agreed.

“We are public-facing businesses… People know us. They've had breakfast here. They may have had dinner here,” he said.

“But, you know, I have friends who are builders and plumbers - and those sectors feel way more hard hit than the hospitality one,” he said.

A note about the data

The data shows the number of businesses removed or added from the companies register.

MBIE says business closure is just one of multiple reasons for the removal of a company from the register.

Others may include the restructuring of a business, the merger of companies, or the retirement of a shelf company that is no longer serving any purpose.

The data is based on the Business Industry Classification (BIC) code, which is not mandatory data.

The code is selected by an applicant at the time a company is being registered on the company's register.

MBIE says that currently, over 70% of companies have provided a BIC code.