Commentary
Please see the overall commercial comment for additional context.
The Hawkes Bay retail sector has been adversely affected by a gradual shift to online shopping, with this trend accelerated by Covid-19. However, the retail sector has been experiencing diverging performance depending upon the market the shop services.
Convenience retail has been the strongest performer. It is yet to experience real competition from online retail, and as such suburban retail shops, particularly those on main traffic routes or slightly larger groups of shops with ample convenient street parking have performed well.
Large format retail has also performed well, as shoppers appreciate the move to clusters of large format retailers and the range of product these retailers typically provide. Rents in this sector has generally risen in recent years, albeit at a subdued pace.
CBD strip retail has not performed well, with market share taken from both online and large format retailers. Further, the Napier CBD has suffered from the lack of cruise ship visitors since Covid-19, among other factors such as the cancelation or downsizing of the Art Deco festival.
The impacts of the weakened economy is ominous for the retail sector, and we expect challenging market conditions to remain for the next few years.
