Swag of retailers shut their doors in Invercargill
A swag of retailers have shut their doors in the city during the past 12 months, with some fearing it could be a sign of worse to come.
According to the Westpac McDermott Miller Consumer Confidence Index, consumer confidence in Southland fell dramatically in the last quarter, with the index dropping from 102.2 in December to 91.6 in March.
The figure indicates there are more pessimists among us than optimists when it comes to Southlands economy, and places Southland second from the bottom for consumer confidence, with the region just above Northland (87.4).
Nationwide record store chain Sounds, which shut its Invercargill doors late last year, clothing store Millers, and manchester store Arbuckles have headed the trend for businesses closing in the city, while other smaller retailers, including giftware store Absolutely Fabulous Gifts, and bedroom furniture specialist Budget Bedrooms, are also now in the process of closing down.
Budget Bedrooms owner Lloyd Davies said high rents in his inner city showroom had contributed to the decision to close.
The arrival of internet auction site Trade Me may have also contributed to a decrease in people buying from shops, while a trend for people to buy new, but inexpensive goods, had also impacted, he said.
Absolutely Fabulous Gifts manager Debbie Hamilton said while she was unsure why the shop was closing, its Dunedin counterpart had already shut.
Southland Chamber of Commerce chief executive Richard Hay said the problem was simple.
Smaller retailers were being hit by increased compliance costs such as the Holidays Act, increases in transport costs and wages, to the point where outgoings were higher than incomings, he said.
%26quot;Many are starting to find that they are earning less income than the people they are employing,%26quot; Mr Hay said.
Hype surrounding the fall of various finance companies, combined with warnings from various agencies to curb spending habits, was also likely to have an impact, resulting in a general tightening of consumer purse strings, he said.
However, it was unlikely Southlands economy was going to go belly up, Mr Hay said.
%26quot;I dont think theres cause for panic that there is a downturn in the regions economy … Theres just a shuffling of the cards.%26quot;
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