Tuesday, September 1, 2020

Oliver Hartwich: Turning cities into ghost towns

Walking around central Wellington, more shops are boarded up. On Lambton Quay, two bank branches recently disappeared. Just as the two Burger Kings on Lambton Quay and Courtney Place. Walking down Featherston St, there are empty shops every 40 or 50 metres.

Reports from New Zealand’s forbidden city, formerly known as Auckland, sound even more alarming.

Where Wellington’s economy was cushioned by steady public sector employment, Auckland felt the brunt of a private sector contraction and now another lockdown. A quick online search of advertised retail premises returned 122 listings in Takapuna alone.

Covid-19 is not the sole cause of this pain. Consumers were already banking using apps, shopping on Internet platforms and buying insurance without face-to-face contact. No wonder insurer AMI, for example, is closing all its brick-and-mortar stores.

The pandemic is accelerating these developments. OfficeMax this week announced shutting all their 14 stores in New Zealand. This follows The Warehouse Group closing six stores and jewellery chain Michael Hill three outlets.

Before the crisis, New Zealand retailers had an average margin of just 3.7%. It does not take much to push these businesses to the brink. Greg Harford, chief executive of Retail NZ, estimates that the second lockdown reduced retail spending by 40% nationally and 80% in Auckland.

He added that a quarter of Retail NZ’s members are not confident or unsure they will survive the next 12 months. That is roughly 6750 businesses.

As inner-city retail struggles, so does hospitality. It is not just the international tourists that are missing. With dying shops around them, people working from home and incomes falling, fewer people are dining out. Add to that another lockdown and this is a death sentence for many bars and restaurants.

No-one knows how long this Covid-19 disaster will continue. But we can already see the scars the virus will leave.

When this public health emergency ends, New Zealand will look different. Gaping holes will exist where there used to be shops, bank and insurance branches, bars, restaurant, jewellers, electronics shops and department stores.

To avoid creating ghost towns, we must find a way of saving lives without destroying the cities they inhabit.

Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative think tank HERE. 


Anonymous said...

NZ is whuct.

Ross said...

Oliver joins dozens speculating on the shape of post covid society, most of whom push old agenda ( eg death of capitalism) to take advantage of the current "crsis".
Oliver may not be old enough to remember 1950' urban NZ...none, or few restaurants, only department store lunch charity shops, dollar shops and very few 'big box' stores jammed full of stuff on it's way shortly to the rubbish bin.
How on earth did N Z function? Certainly plenty of old jokes about putting your clocks back fifty years as you arrived in NZ from more "with it" countries.Nevertheless people like my parents who had experienced Spanish Flu pandemic, first and second world wars plus global depression, lived full and interesting lives without all the nonsense deemed essential today.
Post covid society will be what post covid society will be. Covid plus other major new influences such as AI, and online trading will certainly produce change,...but let's not panic, we will adapt despite idealists, (& governments) foisting their solutions upon us.
I may have rose tinted glasses for past years, but there is much from the past that could usefully be resurrected and much of today which we could well do without!

Chris said...

Back in the 50’s New Zealand relied upon farming to survive, without which, we would have been no better off than the other South Pacific Islands. With the Covid situation and some dodgy decisions by the current government the economy is on very shaky ground and with farming under attack by the greens and labour our future could be very bleak indeed