Hospitality liquidations surge, outpacing retail closures
Wednesday, 3 June 2026
Hospitality business closures are outpacing those of retail businesses, as more firms succumb to the pressures of a depressed economy.
Hospitality liquidations are up 49% year-on-year, with cafes, restaurants and takeaways the largest groups within the 414 hospitality liquidations recorded in the past 12 months, according to data from credit reporting agency Centrix.
There were 219 retail liquidations in the 12 months.
While business credit defaults are trending downward – falling 14% year-on-year – company liquidations remain elevated, rising 17% overall.
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Centrix chief operating officer Monika Lacey said hospitality and retail sectors were performing better, compared to the construction sector, which recorded 780 liquidations in the 12 months.
Lacey said it was unsurprising the sectors were under pressure, given they had endured a long tail of challenges. They were hit hard during Covid, she said, and the shift to working from home had further reduced foot traffic, with fewer people in city offices buying lunch or stopping into shops. She said much of the strain could be attributed to those changes.
“[Ultimately] it just comes down to consumer discretionary spend. If you're going to cut back expenses because things are getting a bit tight, those are probably the two areas that you can control the most.”
Lacey said liquidations often appeared in the data only after a lag of up to several years, and Centrix believed the sectors’ credit positions had since improved in real time.
“A lot of this is driven from a financial position that occurred many years ago.”
She said many of the liquidations reflected credit positions from several years ago, with a major clean‑up now underway. Much of what was appearing in the data, she said, was historic and not necessarily indicative of current conditions.
Centrix’s Credit Indicator report for May shows businesses in general were moving in the right direction when it came to credit conditions.
The report branded the latest figures a “gradual improvement in New Zealand’s credit landscape”, but said the recovery remained uneven across regions and sectors.
Conditions were stabilising for businesses but remained “fragile”, it said.
“Demand for credit has softened slightly overall and company liquidations remain elevated, particularly in construction and hospitality, highlighting persistent financial pressure. Small business owners are exposed, particularly those relying on home equity, reinforcing the close link between household and business financial health.”
At the consumer level, credit conditions were also showing signs of stabilisation, with fewer borrowers falling behind on repayments, and arrears rates continued to decline.
According to the report, credit indicators for hospitality showed liquidations made up just 1.3% of the sector, and 0.5% of the retail sector.
“Although the liquidations are high, as a percentage for those sectors, I think overall as an industry component, it's quite low,” said Lacey.
“Credit defaults for retail are down 13% year on year, for hospitality they're up 1% year on year … it's definitely been improving.”
Consumer credit demand was down 1.9% year-on-year in a softer economic environment in May.
Financial hardship cases declined 9.3% year-on-year, with 13,450 accounts currently reported in hardship – up slightly, but showing a reverse in the upward trend seen since late 2022, Centrix said.
Retail spending figures
Retail NZ chief executive Carolyn Young said the retail sector was seeing an 'uneven recovery across the sector, with some retailers yet to experience a boost'.
Stats NZ’s latest retail trade survey showed core retail spending was up 6% in actual value for the final quarter of last year.
Spending growth occurred across electronics, furniture and hardware, as well as grocery, categories.
Meanwhile, spending on apparel was down 7.8% in the quarter.
Canterbury and Otago led an uptick in spending, up 8.7% and 12.3% respectively in the quarter, likely reflecting activity from farming and the continued recovery in international tourism.
Auckland and Wellington recorded spending growth of 5.8% and 5.6%.