Capital Conversation: We need to come back to the city

Thursday, 19 September 2024

The way we shop has changed for a number of reasons.

Wellington retail seems glum with an increasing list of shops closing down.

But for commercial agent Jim Wana, things are not as bad as they seem and one of the answers is simple.

“Go to work ‒ get in the city and work from the city and help support one another,” he says.

How we shop has changed on the back of a pandemic, the high cost of living, the ease of online shopping and in particular, working from home.

Bricks and mortar shops are, in many ways, at a disadvantage. A website can hold a great deal more stock than most shop floors, not to mention the convenience of having something delivered to your doorstep.

Some of the 59 spaces on the Golden Mile that are either empty, have construction in them or are just long closed.

There’s no mystery about any of that.

So the list of places closing down in Wellington perhaps shouldn’t be shocking, yet it seems that we just recover from the disappearance of one before there is another.

For the last couple of weeks it's been a series of announcements like Pandoro is closing its doors, followed by Stirling Sports, Cafe Classic in Thorndon, Egmont Eatery, the Wooden Spoon Boutique Freezery and now clothing company House of Boom.

Wellington is caught between a job downturn, a needed upgrade that could go on for years, less spending and increasing costs that includes rent and insurance.

Director of sales and leasing for JLL Jim Wana has been working in the Wellington retail scene for 20 years.

Wana says it’s not as bad as the numerous closures suggest.

Director of sales and leasing at Jones Lang LaSalle, Wana has been selling and tenanting retail for about 20 years.

“It’s no secret that the market is difficult. There are any number of reports of businesses closing for various reasons ‒ the hangover from Covid, recession, and council works are not helping businesses.”

But he says there are things happening: “For every bad there is a good.”

JD Sports is due to open in Cuba Mall, taking over the spot Cotton On was in, and Cotton On is moving to a new Lambton Quay site.

One of the biggest things for the city centre is the working from home trend.

“I go to a cafe most mornings ‒ you can tell people are working from home, especially on Mondays and Fridays.”

Associate professor of marketing Mike Lee from Auckland University says attracting people into the central city is key.

Wana said Wellington business had seen a huge jump in with insurance being a massive part of that.

He said Wellington averaged less rent per sq metre than Auckland across office and retail space, but insurance was a huge cost here.

Getting people to come into the city and then spend is what everyone wants.

Auckland University’s associate professor of marketing Mike Lee says there is a psychology to attracting people into an area.

“What happens on a psychological level is you have a couple of stores shut down and an area begins to look a bit sad.”

Retailers looking for a new space don’t want to be beside a set of closed shops ‒ they want a fun buzzy environment so they consider other options, he said.

“If you have to fight the hassle of traffic, parking, walking around in inclement weather, all for very little window shopping, then people think twice.”

Disruption due to construction for things like bus lanes have a flow-on effect that make customers consider going somewhere else.

He said shoppers want the experiences, the atmospherics to go with their retail expedition.

“Part of the reason to go out is the social atmosphere.”

Lee said there were other factors like safety, better selections online and the convenience of having something delivered.

And while an upgrade is a good idea, he warns it’s hard for people to get behind the amount of disruption and construction.

“It’s not appealing to go there when there are road cones by the local shops, along with a lack of parking, that does not help either. “

Wellington's hospitality scene has been taking a bit of a beating, so The Post talked to some of the city's long-standing cafes and restaurants to see what keeps them going.

Lee says it can end up in a kind of death spiral where the city needs foot traffic, but to have foot traffic you need retail.

He has some suggestions that could help.

Subsidies for rent or things like rates could entice businesses, or free public transport travel on weekends like in Perth, or creating hub-like retail areas where a particular type of business gets a subsidy, such as arts or fashion areas.

Equally, Wana says the years-long construction for upgrades to the city will kill off businesses.

“It will affect the rentability of sites for some time and some of those businesses will go broke,” he says.

For Wellington Chamber of Commerce CEO Simon Arcus it’s also all about getting people into the city.

Work from home and public sector job cuts are taking a toll.

Business Central chief executive Simon Arcus says more events could be a way to get people into the city.

“Attracting people into the city is huge,” he said.

Events make a big difference in Wellington. WOW, which is starting next week, brought in $30 million last year and over 60,000 people, a lot of whom spend in local shops.

And Arcus said it appears Wellington has new hot little pockets of activity ‒ like near Moore Wilson’s on the corner of Tory St where pop up shops are growing, or Pickle and Pie in Lombard St.

“There are little shopping hubs evolving. Some retailers want to be near others that are drawing people in and shops are gathering in little hubs around them.”

It’s still hard, he says.

And for some in Wellington it's just too hard in the inner city. The suburbs are where it is at.

When Julie and Paul Gubb closed their iconic footwear store they had considered moving but initially went online instead.

When the opportunity arose for a shop in Khandallah they went with it and Julie said the vibe there reminds her of a time that is now gone in the city centre.

Not all the businesses closing have been physical stores however. House of Boom’s Joanna McLeod, whose business has been online, has also opted to close.

And as she says it’s nothing to do with cycleways ‒ but rather that a large number of her clients were public servants.

“I’m just really, really tired,” she said.

“So tired. And it feels really yuck trying to convince people to pay fair prices for clothing when I know they’re struggling to pay for groceries.

“A good proportion of my customers were public servants, who have either lost their jobs or are living in really uncertain times, so it makes sense that they’re being cautious with their money.”

Rufus and Nicola Topley were paying $13,000 a month for their big Homestore from the Lambton Quay mall Capital on the Quay so opted to move to a smaller premises on Panama St.

But they have also now gone after a year.

Homewares store Cranfields was another casualty from its Johnston St store but is now looking to reopen in a new space.

In this new series, Capital Conversation, The Post is digging even deeper into the issues holding Wellington back, while continuing to champion what’s great