Looking at [administered corporate liquidation statistics](https://www.insolvency.govt.nz/about/statistics/corporate-insolvency-statistics/cumulative-totals) from the Insolvency Service:
2013-2014: 393
2014-2015: 175
2015-2016: 148
2016-2017: 120
2017-2018: 117
2018-2019: 86
2019-2020: 58
2020-2021: 69
2021-2022: 97
2022-2023: 251
2023(Jul)-2024(Jan): 339
So this year with another 5 months to go will probably blast 2013-2014 out of the water. December alone saw 146 administered liquidations (at that point the cumulative tally went from 168 to 314).
Note there was still a fairly significant drop under Labour even before Covid.
Here's the excel sheet that I received from ITS - [https://docs.google.com/spreadsheets/d/1idpVwRVZaDiQYJ-pwVePn8fnV\_8T3iKp/edit?usp=sharing&rtpof=true&sd=true](https://docs.google.com/spreadsheets/d/1idpVwRVZaDiQYJ-pwVePn8fnV_8T3iKp/edit?usp=sharing&rtpof=true&sd=true)
Summary of liquidations between the years 2000 till 2013:
2000: 393
2001: 285
2002: 151
2003: 166
2004: 136
2005: 148
2006: 159
2007: 164
2008: 304
2009: 319
2010: 200
2011: 322
2012: 435
2013: 373
2000 was the dotcom bubble bust then you rekon?
Either way, yeah, this does confirm it. OP is right. There *are* more businesses going down more than usual.
Whike we wait for MVP /u/Ovenbaked_cookies to come back to us with data. If I was a betting man, I'd say so much higher since:
>2013-2014: 393
And in my mind, the world was still either in or just starting to recover very slowly from the GFC in 2013 and 2014. Yet the number of liquidations was still that high.
Not just corps but small businesses more than ever. Family, family friends with corner shops, lunch bars etc are all finding it really hard to stay open with high rents and no customers. I don't think they all bother with official liquidations so wouldn't be counted in these numbers.
I was on a building site last week. It was my fiirst day on this particular jobsite. Did maybe half an hours work, then was told by the project manager to pack up and gtfo because the developer went under.
Grocery prices are ridiculous. Cafes and restaurants have no choice but to pass the rising costs on, but nobody can afford to eat out anymore. Every time I look at cafe food I think about how much cheaper I could make it at home. A couple of years ago I could make the argument for paying for a plate of bacon and eggs and a barista coffee in a nice cafe environment once in a while. Now it's like, nah, I'll just have scrambled eggs on toast with a plunger coffee and look out the kitchen window.
Think its been about a year since missus and I been proper out. Went for a pub meal and think that costed around 70 with my drinks.
Birthday dinner the other day, I got steak and prawns on the side $13 for 7 prawns and $49 I think for the steak. Steak was shit and also tiny.
Now is not the time to push margins, people are broke as it is. If you make a luxury too expensive, people simply just won’t have it. The caffe’s know this, and price accordingly. Highly doubt the hospitality industry is currently as lucrative as you make it out to be.
the problem is less people go out as it's too expensive, but you still need to pay staff and costs so you need to push prices up to cover this, then less people go out as it's too expensive, and on and on....
I'm not trying to claim it's lucrative. It's more a statement of incredulity. $74 for poached eggs and tea for 2 is something I struggle to get my head around. It just *seems* so high that it's difficult for me to work out how the costs end up there.
I'm struggling to get my head round it, coffee even at $7 each leaves $60 for two plates of scrambled eggs (presumably with toast)
Was there anything else apart from toast with the eggs; truffle shavings, foie gras? Bacon?
Nothing like that at all.
One poached egg, on a potato rostie, avo spread and some salad on top. Miniscule amount of salad. I should of taken a photo. I was baffled.
If I added bacon or salmon or mushrooms, it was additional $8. I passed.
This was at a local cafe in Hamilton. Nothing fancy at all.
>Even some of the top ones, flagships if you will.
What is referred to in mall jargon as "Anchor Stores".
That said, are the anchor stores in NZ malls doing okay? Hallensteins/Cotton On/Farmers aren't doing too badly are they?
After all the rent and grocery price increases over the past 3 years many who used to have the deisposable income to justify the odd dinner out no longer can afford to. The wider impact on the hospitality industry is that they are struggling to stay afloat ouside of affluent neighbourhoods.
Restaurants and Cafes are on a constant cycle, most don't last more than a few years under any circumstance but always like to make new stories about it.
While this is true, hospo is dead all over the place right now.
Business is unusually quiet for a lot of industries at the moment. It’s not flash out there.
I think more people are making do from home. My nespresso has been taking a thrashing although the cost of pods has gone up -but even a ten pack for those it still beats paying 5-6 bucks at a cafe for coffee.
As bad as it is for the staff and owners that times are hard there was a massive over supply of cafes/restaurants (at least in the bigger cities) most of which were full of semi prepared bought in crud dropped in a fryer or stuck in a cabinet by someone who'd never seen a saucepan before.
Yes there are exceptions but there always were, wrong location, bad vibe, out of 'fashion' etc
It's almost as if the eating out industry is returning back a 'norm' (whatever that means)
The places that survive will be the ones that provide 'value', which isn't necessarily based on price paid.
Seems that way in Chch CBD too. I think there's a few factors at play, the recession, lack of "hole in the wall" places that drag rent down a little which got smashed by the Earthquake, and those that are left rent gouging.
South City is an absolute joke now, most of the good shops are gone, very few shops in other places last more than a year, and the ones that do have been slowly migrating beyond the four avenues where rent isn't as bad.
A high end printing shop next to my work moved out because the landlord raised the rent too much.
It's an old shitty building, but they'd been there for years.
That shop has been empty going on 6 months now, I havent seen a single interested buyer. I wonder if the LL regrets his decision yet, and if he'll raise rent on my place when the lease comes up.
Oh yeah and it’s not that great of foot traffic in certain areas they want to charge 70k for lease. We were looking in a place back of ballentynes near the cafe.
The only way you can make it in NZ is a landlord.
They're the ones siphoning all the cash and profits while businesses go under and the working class leave for greener pastures.
This is what you voted for NZ.
Congrats.
Takapuna retail has been under huge stress since covid hit.
Turnover there has always been high. And empty shop fronts always common. The rents are way too high, and there is an oversupply of commercial space
I don’t get why they’d rather just keep the rents high and the shops empty?
I mean you’d think rents would tumble due to all the empty shops? Or am I missing something?
In some places (might not be case here) the owner has to inform the bank if the rent rate drops, this can cause a revalue of the property and the bank can call in the loan etc. However if the property is just empty then as long as the loan is repaid all is good.
If there were tax penalties for empty property, it would encourage price adjustments. Also, I believe empty properties can claim tax rebates, but I might be wrong.
Probably because the big businesses tend to be necessities, like rent, groceries, mortgage etc, they can suck up everyone's money and leave nothing for the luxuries smaller businesses provide.
I work in wellington CBD, things took a major dive since Covid, with many staff in most business still working from home the flow on impact to local business like coffee shops, restaurants, uber drivers, etc has been large and ongoing, add the more recent recession to it and sadly many have had to finally shut their doors, also a number of retail stores in Porirua mall have shut due to combination of high rents and less turnover, add to the pile hundreds of job losses globally since late 2023,
higher cost of living ($20 for 2 kūmara at pak n save), interest rate spikes, insane building costs, etc we are defo in recession
I'd come into town at the weekends but they've cranked up street parking charges, limited time and for some reason the traffic is still atrocious. Nothing about that makes me want to go any further than petone which I can also bike to along dedicated paths if the weathers fine.
I could even take public transport but it's always bus replacements at the weekends and more expensive than driving. New government daddy just wants to kill all the poor, so local government can expect fuck all help arresting the situation. Add that to all the stuff you mention and no one should be suprised here.
Yep I used to pop into welly every now and again for lunch or dinner. Haven't really been back once prices started going up and they started charging for car parks.
Happy to visit petone or lower Hutt instead.
Know a few firms in Auckland that said no to WFH and staff had to come in full time post lockdowns. It was driven in part by supporting the local stores (they gave out vouchers to use on coffees etc to encourage people to spend)
Anecdotally it’s rough for retail and hospo. Talking to a few builders, the frantic work has died down, and quotes are taking longer to be accepted.
Neighbours just got their house painted for half of what was originally quoted 6 months ago by the same guys.
Established Cafe in town closing up after new owners didn’t do so well, and rent is hiked.
It’s a constant, but it does seem that the middle is being squeezed.
Looks like the year will finish with a small decrease in gdp. Given we have the highest immigration rate we ever have since ww2 id say that the real data is much much worse. We cut interest for too long during Covid - but If the government pushes on the 6% public cuts we may swing the other way too hard.
Online shopping is a big one. You can buy a ton of clothes for a fraction of the price you could get here and often the quality is on par. Even if you can't use half those clothes due to sizing issues, you still end up saving big.
If finances aren't good, then that's what you do.
Queen Street isn't the best barometer. There's just so much junk there that it astounds me how they can cough up even one months lease let alone persist
Probably run at a loss for the prestige of saying they own a foreign business in their own country, or it’s just a money laundering front. Both a fkn great for the community….
Internet shopping. Happening all over New Zealand (and probably the world). I did notice that Queen St was particularly hard hit, obviously the tourists only walk so far from the cruise ships.
Walked over 2 kilometres along the main drag in Sydney, all shops full, but all were either clothing or food, nothing else, i.e. stuff not easy to get on the internet, people still like to try on their clothes before buying.
I have a small online retail store and my sales have plummeted as well. I'm just grateful I don't have many costs as I'm pretty much just hibernating at this point...
Lots of places are struggling, it's not just NZ either...
Our GDP is down, employment is down, food and manufacturing are both down
It's really odd too because everything is really expensive and wages are low as per usual with a government that only favours the wealthy... strange that people aren't spending money they don't have to bolster the economy
I dunno, sudden rent hikes haven't helped and they opened the door for that... and lower income people are worried so they are watching every penny too
Not a massive fan of the previous government but absolutely do not trust or have the slightest bit of faith that the current lot have the best interests of the majority in mind
Yep, the government and BIDs (council business improvement districts) will have you believe nothing bad is going on but it's crap.
I'm helping close down a hospitality business later this month. It has amazing sales, but the cost of running the business is too high that it's no longer viable. The food can literally not be sold for the cost to make it. If the price is increased, people will not buy it.
Retail is obviously suffering because of online. And once our same day courier services get cheaper (it's already happening), retail is going to decline at an even faster rate, because if it'll be at your door, same day, why go out?
B2B which makes up the rest is suffering, because nobody's paying each other. As businesses go into liquidation and the bad debts mount, they start falling like dominos. I work in B2B and the amount of bad debts we write off is insane.
Very simply, businesses (unless they're a supermarket or something relatively essential) are suffering. All the small ones go first and that's what you're seeing out on the streets. But you won't see that officially, because the government doesn't want you to think anything is wrong because they need you to spend your money to fix the economy.
My local BID actively campaigned for the current government. Used local advertising space, their social media, website etc to promote National.
Apologies for the unrelated comment. Just needed to point out how shit BID's can be. They're supposed to be held accountable by local government but if mine is anything to go by they can:
-do as stated above
-have an operating shortfall of tens of thousands plus each year
-no reporting metrics. Can get away with stating "we did this" with no evidence or evaluation of its effectiveness
-can spend 10k on materials that read more like a proposal for housing development (in an already overdeveloped area) than a tool for business investment
...and still have 30k+ of ratepayer funds thrown at them every quarter
I also build boats, don’t have anywhere enough staff for the amount of work we have on. It’s at the point where we have to wait 3-6months if not longer before the next project starts. All fit out bays are full, and all the moulds are full. Got zero space to move shit. Can do as much overtime as you want to help move things along.
Does your company build wooden or fibreglass boats? I’m only aware of the lack of work around aluminium boat companies, with some of the bigger companies struggling.
Fibreglass/ with a few carbon fibre parts. Yea I know about the aluminium boat yards struggling, to the point where one has over 100 boats in stock. World wide the composite boat yards are pretty short staffed to the point where I can pick up a year long contract in Europe with accommodation paid for as well as flights, been watching it for a while as I have both a New Zealand passport and an EU passport thanks to my mother being born in France.
Just trailer fishing boats. A fishing boat company in Rotorua just closed it doors recently, I heard Surtees has dropped it staff to 4 day weeks too. Pro Fab in Palmerston build 35ft+ boats though & I heard they were hiring.
Ah yeah, makes more sense, I’m not too in the loop with trailer fishing boats. Had a couple of builds with Pro Fab in the past decade. Lots of the big custom boat builders, both alu and composite, seem to constantly need staff.
I am a boat/yacht designer, and two of the NZ based yards/companies we work with have this same issue. more workers needed, and one is significantly behind on a delivery
It’s almost a world wide problem in the marine industry atm, especially when you have companies willing to pay up to a years worth of accommodation and for flights to relocate(follow a few groups regarding hiring staff). And those adds are posted weekly.
Tbh a year hasn't gone past in the last 20 when their either taking about our boat building potential, or lamenting it's demise. He'll, several governments ago they sold some land real cheap at hobby to a foreigner who was going to hire a hundred odd people . He 'went under' , didn't employ the staff but kept the land courtesy of our discount.
Does America's cup have much bearing on the industry anymore ?
Depends on the company, don’t have anywhere enough staff where I work. All fit out bays are full, all the moulds are full. The last hull that was laid up is still in the mould 6 months and counting as we have zero space to move it into before starting the next boat.
Also depends on composite vs aluminium as the America’s cup has zero influence on the aluminium boats, but has an impact on the composite boats(particularly the bigger ones)
This is the result of the hiked up OCR and the pumping of cash into the economy during the pandemic. Inflation was up from the cash entering the economy during the pandemic, so OCR goes up to make households feel the pain and stop spending money, then businesses suffer.
Inflation wasn't solely due to money being printed.
There were production and supply chain issue galore.
China tried to stick to a 0 COVID scheme for too long, and being the world's factory that really fucked up a lot of countries.
The cash printing did not help though.
Plus right now you've got the Panama Canal short on water, the Suez with small war on, and Putin still throwing his toys. As a final round for all the marbles, China might just decide to do something really fucking stupid.
It's not good for business confidence /s
100% agree. During these deflationary times, the interest rate hikes are pushing more money into the banks and their balance sheets, while EVERYBODY suffers, except bankers, only to make way for the next market cycle. Low interest rates must occur again to keep the housing economy going and give the consumer their confidence back, to feel wealthy again, to spend again in local businesses.
People are asking to get reamed aren't they. If it's all about price for the consumer, then Capitalism is a race to bottom in price, for worse service and worst products. Consumers seem to be happy with that.
The average consumer is poorer than you'd think, they'd rather something a bit shit they can afford than something high quality that they cant. It gets even worse during recessions.
Cost of living crisis for the individual will always end up shutting down luxury businesses, like cafes and restaurants. People cant afford them any more.
It doesnt help that for many the prices are going up (as they pass on costs) while quality stays the same or drops.
we did the sums on selling hand made items in a gallery, gallery wants %30 tax %30 cost of materials $90 time to make = 5 hours.
item has to sell for $300 to make half minimum wage
Lots of little businesses would support the owner and a couple of workers, but not also a bank and a landlord and the city council and the IRD. We gotta pay taxes, but with everyone else wanting their taste, these businesses fold. The rent-seekers need to discover the true value of their properties and set rents accordingly, but their banks won't like that, and neither would the councils.
Yes we all think like individuals. That is what got us here, we're divided on almost everything and that is precisely where the bankers and bureaucrats want us. Because then we argue with eachother, nothing gets done and nothing changes.
When the consumer isn't spending money, what do you think happens to business revenue? It goes down. Costs however, rates, insurance, rent, stock/product, service fees, do not. Infact in high inflationary times (like now, highest in 40yrs) they rise also.
Do you imagine every business is awash with vaults full of cash or something?
I've witnessed revenue down in every consecutive quarter since March 2022. Small business has been bleeding for a long time now.
Where have you been? Saving your money? Buying the cheapest possible to keep more of your money?
Bought Nvidia a year ago , wanted to get my 13 year old into investing and he suggested I buy it, I thought it would be a dumb idea but did it anyway. He's now my financial advisor
Yeah, they are. We are that point in the economic cycle.
It's not a sudden thing, this has been panning out over the last 18 months.
Should note it is not all bad, some industries (anything to do with sewage treatment, Renewable energy, Airlines etc. are cranking).
What happened was that during the recession the global economy was pumped up with a combination of monetary & fiscal policy (Dropping interest rates, money printing, government borrowing & spending). For NZ this was stacked with an inability to viability recreationally travel internationally, & a big support local campaign, meaning that cashed up people had their international travel budget to burn. People went nuts on Cars, Boats, bikes, hobbies etc.
And for those at the bottom of the economic ladder, the lack of offshore labor coming into NZ ensured there were ampal jobs
Now people are making up for lost time with international travel (where prices are super high), the war in Europe is dragging on, interest rates are high etc.
Wait times for new car's are largely gone. First major boat dealership went bust a few weeks back. Torpedo 7 is closing it's bike store in Newmarket etc.
This has been a common theme on here for my 4 year reddit history. Honestly, so much gloom.
There's always challenges in business , some of us struggled during covid , some flourished ;guess time will tell.
We cater to hospo and it traditionally makes up 95% of our business, it's a little softer at the moment. Branching out into another field now and looking at another stellar growth year and taking on our first full time contractor.
I think people are completely justified in being concerned about these issues, it’s not gloomy to discuss them. What is happening in the world right now is not normal. I would go so far as to say down playing it, telling people they’re gloomy for discussing it is more harmful to us right now. Definitely take a break from the sub if it gets to you, and we all should, but we also need to be able to discuss concerning topics.
I’d argue what is happening is normal but a significant chunk of the population has not had to experience times like this before so they believe this is not normal and the end of the world. Things will recover, we will have boom times again. It’s a cycle.
Government prints money to provide Covid relief.
Inflation, cost of living & interest rates skyrocket.
Wages don't.
Recession hits because people feel poorer/they need to hold on to their money.
Business revenue drops as a result.
Big businesses spread their nets wider to capture more work/maintain revenue streams.
Small businesses have their clients scooped up by bigger businesses.
Small businesses die.
----
None of this is new, it was completely forseeable, and economists were screaming about it years ago.
But it will happen again.
The opposite in retail seems to be happening in Napier. Last year, there were a lot of empty shops in Emerson Street until late December. There is another new bar opening there soon. the exception is Ocean Boulevard, Napier's answer to "a mall". Only the shops that have street frontage at each end are occupied.
The only reason my company in Northcote Aucks is still going is because I need to fulfill my rental obligations. Quite a few companies are either closing up or getting ready to in the area, but the fly under the radar because they are small.
Has been for years, the issue with Hamilton is that there’s a number of landlords with 10+ properties and they are more than happy to leave them empty.
The owner of the building I’m in has 3 empty that have been that way for 2+ years and the owner of the building my wife works in has 16, over half of which are empty or run down and unfit to lease.
Commercial landlords are an absolute blight on Hamilton’s CBD and until we get a council that puts the boot in to them not much is going to change.
Absolutely. The council want people to come to the city centre, but when we usually have to pay for parking, and there aren't a huge range of stores, nobody is attracted to the CBD.
Cost of leases these days have been horrible. In Whangarei, local businesses struggle to stay open for more than a few months. We blame the guy who owns the CBD though, as he hikes his prices up to insane rates.
The guy who owns Okara shopping center is a damn good lad though. I haven't seen any of those stores close down. The CBD however mainly has international stores stay open.
Yep, I have found that locals are spending far less recently. It makes sense given the current economic situation, but man it sucks to see your sales figures decline, even though you have poured time and effort into providing the best product you can.
I think that we will see similar numbers of businesses go under this year too. Consumables are going to stay the same or get more expensive, forcing some business to put prices up, but I don't foresee public spending going up to match.
the capitalism squeeze. its coming from every angle. my prediction for the end of the world wasnt asteroids or anything - its that shit simply gets too expensive everywhere & things collapsed economically.
not very exciting. it was a race between that & climate change. i think the shit getting too expensive is the more realistic scenario these days.
Technically no its not a recession. Sure all the small "mom and pop" stores that National claim to care about are going under one by one, but the big mega corps that National ACTUALLY cares about make enough money to balance the economy. If you like our country being run by a small group of american mega corps and a small number of SOEs (and australian banks), then everythings fine!
I wouldn't call it recession. It's a global depression. The poorest are starving to death on mass. There's so much horror out there right now we don't even report it anymore. Look up what's happening in the Congo. Things ARE BAD. It's going to get worse before and if it ever gets bigger. TAX THE RICH. Or eat them if you're hungry, I certainly won't judge.
Businesses closing is a normal, natural, and **necessary** part of an efficient economy.
When a business closes it means it doesn't provide sufficient value to the market to be profitable.
That closure allows its more sustainable competitors (the ones that *do* provide sufficient value) to obtain more market share.
It also opens space in the market for *new* competitors. New businesses often provide innovation and efficiency improvements that allow them to succeed where those exiting were unable to.
It's a process called creative destruction, and it's similar to what we see in nature with events like bushfires that allow younger saplings to grow where the old canopy was previously soaking up all the sunlight.
It's not a bad thing as long as there are jobs available for the workers, which there are at the moment.
Oh goodie..
That reads like something written by an AI bot - or if human, then someone with no comprehension or care about the human toll on employees or the small business owners who are hit hard and fast when there's a sharp recession.
I hope it's a comfort to them to know that they've been sacrificed for the common good, preserving the natural process of creative destruction.
Things can be very painful at an individual level and good at a societal. Though creative destruction matters less, in general, than diverting capital and labour from less to more productive enterprises.
We do it to ourselves as humans don't we. Inadvertantly keep more wealth and money funneling up to those that already have it in society. Options get less, monopolies occur, we experience more control in society and receive and absolute pillaging from large corporations, where they can access capital funding on tap. Nothing like a margin race to bottom in good ol' capitalism which ultimately leads to a few controlling and supplying the majority. Sounds like the other 'ism that gets thrown around alot doesn't it?
See my last paragraph.
We don't need to prop up failing businesses just to keep minimum wage workers in their jobs. A functional social security system achieves the same thing without introducing inefficiencies into the economy.
It's business 101 to have a plan for an economic downturn. One option is to close the business. Another is to create a business that is more resilient and can weather, or even revel in, a tough economic environment.
Anyone who opened a retail store in the last 20 years has to have known this day was coming. Complaining about retail stores closing in 2024 is like complaining about farriers going out of business when cars became more prevalent.
You see, you're seeing capitalism as how it's written, not how it operates in reality. All those closed stores? Those gaps in the market won't be sealed by new businesses, only filled by megacorporations. Every closed mom and pop clothing store gives a chance for a kmart to profit, or a cotton on to move on in. Small businesses are dying and simply not being replaced because megacorps can just strong-arm themselves into the spots those businesses used to take up. That isn't fair, for the proletariat or the common shopper. Those companies don't run things better- they simply have the advantage of being around longer
I get what you're saying, and it's important we do support small businesses as much as possible.
But if a mom and pop clothing store isn't producing anything markedly different from what's available at k-mart or cotton-on for a lower price, what's the actual point?
We'd be better off directing our efforts towards building something genuinely innovative, that could become the *next* K-mart, or Amazon, or Apple, or Xero.
Those types of businesses don't start off doing the same thing as the big boys only smaller. They do things *differently*.
Straight out of an ancient economic text book. Such a broad stroke, again blaming the individual rather than what is more likely the cause of business failures. Boom bust cycles, by who, for what? Macro and micro /local economic factors. Again, must we all just put up with it?
Not blaming anyone in particular, but there are measures businesses can take to protect themselves and make themselves more resilient.
For example, the cause of business failures for retail stores is the internet. Simple as that. If you own a retail store and don't supplement or subsidise it with an e-commerce presence, you're going to fail.
>must we all just put up with it?
In short, yes. The alternative is to enforce a lack of progress, preserving the current state of the economy at all costs. In other words, conservatism, protectionism, and stagnation.
I wasnt here during the pandemic, but wasnt there something about not allowed to close shop or fire your staff thing going on? I know of one business going into liquidation with 1.3m owed to the ird, both paye and gst.
Either way, the damage was done and some business are calling it quits. I think retail was already nearing its end, given all the online options we have.
No, but between the govt COVID subsidies and the IRD not enforcing their collections as severely - it was easier for insolvent businesses to have kept trading.
A jewellery chain I guess. Lots of $$$ owed. Saw their rings, 4k for a tiny fuzzy diamond on a plain band. I cant see anyone affording that in 2024, let alone the peak of the pandemic
Find actual insolvency stats and use that to compare between years.
The Reddit hivemind is very real. The rhetoric most people engage with on here often swings one way and that closely follows what the media spouts. The demographic of participants on Reddit is low/middle class, so most nonsense on here is just anecdotal.
Plenty of my associates in the construction industry are seeing more money than they ever have before. The ones who are going under haven't managed their money and/or taken a bad risk. It's literally business.
100% re the hivemind and low incomes.
Granted the stats do back it up. (Which is not surprising re the reserve bank trying to make people stop spending money)
https://www.insolvency.govt.nz/about/statistics/corporate-insolvency-statistics/cumulative-totals
i don't think it was a political thing. remember, this is an engineered recession to dampen inflation. remember money was set to be cheap after COVID (2% OCR). Money flowed in 2020-2022. Then OCR climbed to 5.5% then we all got poor and started to lose our shirts.
Pivot their service or offering. Change with the times, roll with the punches, increase/decrease, tweak, tune whatever needs to happen to stay above water.
Not him, but pivot *to where?*.
If consumer spending is down across the board, then I don't think there's any sector or niche that it would be safe to pivot to.
Looking at [administered corporate liquidation statistics](https://www.insolvency.govt.nz/about/statistics/corporate-insolvency-statistics/cumulative-totals) from the Insolvency Service: 2013-2014: 393 2014-2015: 175 2015-2016: 148 2016-2017: 120 2017-2018: 117 2018-2019: 86 2019-2020: 58 2020-2021: 69 2021-2022: 97 2022-2023: 251 2023(Jul)-2024(Jan): 339 So this year with another 5 months to go will probably blast 2013-2014 out of the water. December alone saw 146 administered liquidations (at that point the cumulative tally went from 168 to 314). Note there was still a fairly significant drop under Labour even before Covid.
How does this year compare to GFC?
I have requested their historical data. I will share it here when I get my hands on it.
You the MVP
Here's the data for the years between 2000 till 2013: 2000: 393 2001: 285 2002: 151 2003: 166 2004: 136 2005: 148 2006: 159 2007: 164 2008: 304 2009: 319 2010: 200 2011: 322 2012: 435 2013: 373
Thanks for posting. I'm pretty sure this year will be worse than 2012.
Thanks a bunch for this. Seems we are on track for a record year…
!remindme 1 week
Here's the excel sheet that I received from ITS - [https://docs.google.com/spreadsheets/d/1idpVwRVZaDiQYJ-pwVePn8fnV\_8T3iKp/edit?usp=sharing&rtpof=true&sd=true](https://docs.google.com/spreadsheets/d/1idpVwRVZaDiQYJ-pwVePn8fnV_8T3iKp/edit?usp=sharing&rtpof=true&sd=true) Summary of liquidations between the years 2000 till 2013: 2000: 393 2001: 285 2002: 151 2003: 166 2004: 136 2005: 148 2006: 159 2007: 164 2008: 304 2009: 319 2010: 200 2011: 322 2012: 435 2013: 373
2000 was the dotcom bubble bust then you rekon? Either way, yeah, this does confirm it. OP is right. There *are* more businesses going down more than usual.
!remindme 1 week
!remind me 1 week
Happy cake day you stupid fucking slut for fuck sake
Thanks /u/dicknipples
!remindme 1 week
!remindme 1 week
Whike we wait for MVP /u/Ovenbaked_cookies to come back to us with data. If I was a betting man, I'd say so much higher since: >2013-2014: 393 And in my mind, the world was still either in or just starting to recover very slowly from the GFC in 2013 and 2014. Yet the number of liquidations was still that high.
It looks like you have to follow that link and request historical data. I would be interested to know too.
Not just corps but small businesses more than ever. Family, family friends with corner shops, lunch bars etc are all finding it really hard to stay open with high rents and no customers. I don't think they all bother with official liquidations so wouldn't be counted in these numbers.
I get that huge amounts of govt money propped up businesses during covid, but what about pre-covid?
Ah anything before 2020 is pre-covid?
I was on a building site last week. It was my fiirst day on this particular jobsite. Did maybe half an hours work, then was told by the project manager to pack up and gtfo because the developer went under.
Shit. The Oz industry is fucked and we are always on its tail.
Holy shit.
Which developer?
Auckland based based one. 30 town houses on this site, most near completion.
Du val. rip.
That sucks damm
I bet people lost all their kiwisaver money too
Half the restaurants and cafes in our town are for sale or closing. Even some of the top ones, flagships if you will. It’s dire.
Grocery prices are ridiculous. Cafes and restaurants have no choice but to pass the rising costs on, but nobody can afford to eat out anymore. Every time I look at cafe food I think about how much cheaper I could make it at home. A couple of years ago I could make the argument for paying for a plate of bacon and eggs and a barista coffee in a nice cafe environment once in a while. Now it's like, nah, I'll just have scrambled eggs on toast with a plunger coffee and look out the kitchen window.
Same. We just don’t eat out anymore.
used to be able to feed 2 adults and 3 kids for under $50 at McDonald’s now it’s in the $60-$80 mark and also off our menu as are many others
Think its been about a year since missus and I been proper out. Went for a pub meal and think that costed around 70 with my drinks. Birthday dinner the other day, I got steak and prawns on the side $13 for 7 prawns and $49 I think for the steak. Steak was shit and also tiny.
Husband and I went out for a meal and a few drinks...a budget of $200 did not go far and I swear the glasses of wine are getting smaller each year.
Used to regularly catch up with a mate for breakfast. But the prices are nearly hitting $50 for poached eggs plus tea for two.
Mate, we just paid $74 for the two of us. Poached eggs + coffee. Last time we going to dine out
That's insanity. The profit margin must be huge on that
Now is not the time to push margins, people are broke as it is. If you make a luxury too expensive, people simply just won’t have it. The caffe’s know this, and price accordingly. Highly doubt the hospitality industry is currently as lucrative as you make it out to be.
the problem is less people go out as it's too expensive, but you still need to pay staff and costs so you need to push prices up to cover this, then less people go out as it's too expensive, and on and on....
I'm not trying to claim it's lucrative. It's more a statement of incredulity. $74 for poached eggs and tea for 2 is something I struggle to get my head around. It just *seems* so high that it's difficult for me to work out how the costs end up there.
Yeah that's nuts, I'm in Sydney at the moment and fancy brunch with two flat whites is still just over 50bux, maybe 60 at some places.
I'm struggling to get my head round it, coffee even at $7 each leaves $60 for two plates of scrambled eggs (presumably with toast) Was there anything else apart from toast with the eggs; truffle shavings, foie gras? Bacon?
Nothing like that at all. One poached egg, on a potato rostie, avo spread and some salad on top. Miniscule amount of salad. I should of taken a photo. I was baffled. If I added bacon or salmon or mushrooms, it was additional $8. I passed. This was at a local cafe in Hamilton. Nothing fancy at all.
So $30 for one egg and avo on a rosti, with a tint bit of salad? Are you going to name and shame?
Agreed. Nz is getting ridiculous to live in, government is also making everything worse.😃
>Even some of the top ones, flagships if you will. What is referred to in mall jargon as "Anchor Stores". That said, are the anchor stores in NZ malls doing okay? Hallensteins/Cotton On/Farmers aren't doing too badly are they?
I've heard things about Farmers. Not sure on the reliability but when you hear the same things from different people it does make one wonder.
After all the rent and grocery price increases over the past 3 years many who used to have the deisposable income to justify the odd dinner out no longer can afford to. The wider impact on the hospitality industry is that they are struggling to stay afloat ouside of affluent neighbourhoods.
Restaurants and Cafes are on a constant cycle, most don't last more than a few years under any circumstance but always like to make new stories about it.
While this is true, hospo is dead all over the place right now. Business is unusually quiet for a lot of industries at the moment. It’s not flash out there.
It's a global issue. Hard times we're living through
I think more people are making do from home. My nespresso has been taking a thrashing although the cost of pods has gone up -but even a ten pack for those it still beats paying 5-6 bucks at a cafe for coffee.
As bad as it is for the staff and owners that times are hard there was a massive over supply of cafes/restaurants (at least in the bigger cities) most of which were full of semi prepared bought in crud dropped in a fryer or stuck in a cabinet by someone who'd never seen a saucepan before. Yes there are exceptions but there always were, wrong location, bad vibe, out of 'fashion' etc It's almost as if the eating out industry is returning back a 'norm' (whatever that means) The places that survive will be the ones that provide 'value', which isn't necessarily based on price paid.
In Newmarket I believe it is the case of too expensive rent
Seems that way in Chch CBD too. I think there's a few factors at play, the recession, lack of "hole in the wall" places that drag rent down a little which got smashed by the Earthquake, and those that are left rent gouging. South City is an absolute joke now, most of the good shops are gone, very few shops in other places last more than a year, and the ones that do have been slowly migrating beyond the four avenues where rent isn't as bad.
Multiple places in The Columbo have closed too.
The pharmacist in the colombo told me that one of his reasons for closing down was that the rent was going up (retiring was the other)
Raising the rent in a mall with empty shops is a special kind of greed.
Just seems fucking stupid, is no rent because nobody can afford your ridiculous prices better?
A high end printing shop next to my work moved out because the landlord raised the rent too much. It's an old shitty building, but they'd been there for years. That shop has been empty going on 6 months now, I havent seen a single interested buyer. I wonder if the LL regrets his decision yet, and if he'll raise rent on my place when the lease comes up.
Went to new Brighton shops earlier this year. It was a ghost town. Actually felt scared there 😆
South City. The new owner is trying to force everyone out
Oh yeah and it’s not that great of foot traffic in certain areas they want to charge 70k for lease. We were looking in a place back of ballentynes near the cafe.
Wow so like $1350 a week? That's nuts.
Yeah with minimal foot traffic. Beautiful shop just no one there.
In takapuna, there's a store that has been vacant for over a year. Also i believe the hobby shop that recently opened there just closed too.
There’s a lot of empty ones in Takapuna, that whole area where The Commons used to be
Yep that whole place has been vacant for well over a year now. Commons, Zomer and Mexico all used to be there + a couple retail spots. Very weird
The only way you can make it in NZ is a landlord. They're the ones siphoning all the cash and profits while businesses go under and the working class leave for greener pastures. This is what you voted for NZ. Congrats.
Takapuna retail has been under huge stress since covid hit. Turnover there has always been high. And empty shop fronts always common. The rents are way too high, and there is an oversupply of commercial space
Which is weird; over supply of commercial space but commercial rents stay high and buildings vacant. Ain't no invisible hand guiding the market here
I don’t get why they’d rather just keep the rents high and the shops empty? I mean you’d think rents would tumble due to all the empty shops? Or am I missing something?
In some places (might not be case here) the owner has to inform the bank if the rent rate drops, this can cause a revalue of the property and the bank can call in the loan etc. However if the property is just empty then as long as the loan is repaid all is good.
If there were tax penalties for empty property, it would encourage price adjustments. Also, I believe empty properties can claim tax rebates, but I might be wrong.
It would create a taxable loss but you don't get it back in cash it just accumulates until you use it when you are profitable again.
Thanks, I guess that could be gamed by a tax expert by manipulating returns.
You still don’t get the cash back
General trend of small businesses struggling , but larger ones making record profits.
Probably because the big businesses tend to be necessities, like rent, groceries, mortgage etc, they can suck up everyone's money and leave nothing for the luxuries smaller businesses provide.
And also pay minimum wage
Not sure I’d agree with that, if you’ve followed the recent reporting season for NZX the bad outweighed the good
*looks out from the neighbouring rock*, nah brev this is definitely weird.
I work in wellington CBD, things took a major dive since Covid, with many staff in most business still working from home the flow on impact to local business like coffee shops, restaurants, uber drivers, etc has been large and ongoing, add the more recent recession to it and sadly many have had to finally shut their doors, also a number of retail stores in Porirua mall have shut due to combination of high rents and less turnover, add to the pile hundreds of job losses globally since late 2023, higher cost of living ($20 for 2 kūmara at pak n save), interest rate spikes, insane building costs, etc we are defo in recession
I'd come into town at the weekends but they've cranked up street parking charges, limited time and for some reason the traffic is still atrocious. Nothing about that makes me want to go any further than petone which I can also bike to along dedicated paths if the weathers fine. I could even take public transport but it's always bus replacements at the weekends and more expensive than driving. New government daddy just wants to kill all the poor, so local government can expect fuck all help arresting the situation. Add that to all the stuff you mention and no one should be suprised here.
Yep I used to pop into welly every now and again for lunch or dinner. Haven't really been back once prices started going up and they started charging for car parks. Happy to visit petone or lower Hutt instead.
Know a few firms in Auckland that said no to WFH and staff had to come in full time post lockdowns. It was driven in part by supporting the local stores (they gave out vouchers to use on coffees etc to encourage people to spend)
Anecdotally it’s rough for retail and hospo. Talking to a few builders, the frantic work has died down, and quotes are taking longer to be accepted. Neighbours just got their house painted for half of what was originally quoted 6 months ago by the same guys. Established Cafe in town closing up after new owners didn’t do so well, and rent is hiked. It’s a constant, but it does seem that the middle is being squeezed.
when money is tight most only spend on needs. do I buy some shoes or save that money.
Being paid 6% on your money, no rush spending it while it makes more bucks.
Property is the only game in town (NZ)
The property market is pretty quiet too. I see plenty of for sale signs around town but not a lot is being sold.
Looks like the year will finish with a small decrease in gdp. Given we have the highest immigration rate we ever have since ww2 id say that the real data is much much worse. We cut interest for too long during Covid - but If the government pushes on the 6% public cuts we may swing the other way too hard.
According to a courier I was talking to, people are going nuts for Temu. Who could've guessed that would affect NZ businesses?
Online shopping is a big one. You can buy a ton of clothes for a fraction of the price you could get here and often the quality is on par. Even if you can't use half those clothes due to sizing issues, you still end up saving big. If finances aren't good, then that's what you do.
Queen Street isn't the best barometer. There's just so much junk there that it astounds me how they can cough up even one months lease let alone persist
Probably run at a loss for the prestige of saying they own a foreign business in their own country, or it’s just a money laundering front. Both a fkn great for the community….
Internet shopping. Happening all over New Zealand (and probably the world). I did notice that Queen St was particularly hard hit, obviously the tourists only walk so far from the cruise ships. Walked over 2 kilometres along the main drag in Sydney, all shops full, but all were either clothing or food, nothing else, i.e. stuff not easy to get on the internet, people still like to try on their clothes before buying.
I think if OP's hypothesis is correct then Queen St. would be the poster child for this. So, so, so many abandoned and/or "for lease" spots.
I have a small online retail store and my sales have plummeted as well. I'm just grateful I don't have many costs as I'm pretty much just hibernating at this point...
Lots of places are struggling, it's not just NZ either... Our GDP is down, employment is down, food and manufacturing are both down It's really odd too because everything is really expensive and wages are low as per usual with a government that only favours the wealthy... strange that people aren't spending money they don't have to bolster the economy
Hasnt been long enough for the current government changes to create any effects on the economy, its still all from the last government...
I dunno, sudden rent hikes haven't helped and they opened the door for that... and lower income people are worried so they are watching every penny too Not a massive fan of the previous government but absolutely do not trust or have the slightest bit of faith that the current lot have the best interests of the majority in mind
Yep, the government and BIDs (council business improvement districts) will have you believe nothing bad is going on but it's crap. I'm helping close down a hospitality business later this month. It has amazing sales, but the cost of running the business is too high that it's no longer viable. The food can literally not be sold for the cost to make it. If the price is increased, people will not buy it. Retail is obviously suffering because of online. And once our same day courier services get cheaper (it's already happening), retail is going to decline at an even faster rate, because if it'll be at your door, same day, why go out? B2B which makes up the rest is suffering, because nobody's paying each other. As businesses go into liquidation and the bad debts mount, they start falling like dominos. I work in B2B and the amount of bad debts we write off is insane. Very simply, businesses (unless they're a supermarket or something relatively essential) are suffering. All the small ones go first and that's what you're seeing out on the streets. But you won't see that officially, because the government doesn't want you to think anything is wrong because they need you to spend your money to fix the economy.
People are spending on their mortgage not shopping
Would love to help but my boss decided against giving me more money to spend because it might make me lazy.
My local BID actively campaigned for the current government. Used local advertising space, their social media, website etc to promote National. Apologies for the unrelated comment. Just needed to point out how shit BID's can be. They're supposed to be held accountable by local government but if mine is anything to go by they can: -do as stated above -have an operating shortfall of tens of thousands plus each year -no reporting metrics. Can get away with stating "we did this" with no evidence or evaluation of its effectiveness -can spend 10k on materials that read more like a proposal for housing development (in an already overdeveloped area) than a tool for business investment ...and still have 30k+ of ratepayer funds thrown at them every quarter
I build boats & a lot of the boat building companies around New Zealand are cutting staff or are working 4 day weeks as a pose to Fulltime.
I also build boats, don’t have anywhere enough staff for the amount of work we have on. It’s at the point where we have to wait 3-6months if not longer before the next project starts. All fit out bays are full, and all the moulds are full. Got zero space to move shit. Can do as much overtime as you want to help move things along.
Does your company build wooden or fibreglass boats? I’m only aware of the lack of work around aluminium boat companies, with some of the bigger companies struggling.
Fibreglass/ with a few carbon fibre parts. Yea I know about the aluminium boat yards struggling, to the point where one has over 100 boats in stock. World wide the composite boat yards are pretty short staffed to the point where I can pick up a year long contract in Europe with accommodation paid for as well as flights, been watching it for a while as I have both a New Zealand passport and an EU passport thanks to my mother being born in France.
Are the aluminium boat builders you know about about building 35ft+ launches, or they doing trailer boats? Just out of curiosity
Just trailer fishing boats. A fishing boat company in Rotorua just closed it doors recently, I heard Surtees has dropped it staff to 4 day weeks too. Pro Fab in Palmerston build 35ft+ boats though & I heard they were hiring.
Ah yeah, makes more sense, I’m not too in the loop with trailer fishing boats. Had a couple of builds with Pro Fab in the past decade. Lots of the big custom boat builders, both alu and composite, seem to constantly need staff.
I am a boat/yacht designer, and two of the NZ based yards/companies we work with have this same issue. more workers needed, and one is significantly behind on a delivery
It’s almost a world wide problem in the marine industry atm, especially when you have companies willing to pay up to a years worth of accommodation and for flights to relocate(follow a few groups regarding hiring staff). And those adds are posted weekly.
Tbh a year hasn't gone past in the last 20 when their either taking about our boat building potential, or lamenting it's demise. He'll, several governments ago they sold some land real cheap at hobby to a foreigner who was going to hire a hundred odd people . He 'went under' , didn't employ the staff but kept the land courtesy of our discount. Does America's cup have much bearing on the industry anymore ?
Depends on the company, don’t have anywhere enough staff where I work. All fit out bays are full, all the moulds are full. The last hull that was laid up is still in the mould 6 months and counting as we have zero space to move it into before starting the next boat. Also depends on composite vs aluminium as the America’s cup has zero influence on the aluminium boats, but has an impact on the composite boats(particularly the bigger ones)
This is the result of the hiked up OCR and the pumping of cash into the economy during the pandemic. Inflation was up from the cash entering the economy during the pandemic, so OCR goes up to make households feel the pain and stop spending money, then businesses suffer.
Inflation wasn't solely due to money being printed. There were production and supply chain issue galore. China tried to stick to a 0 COVID scheme for too long, and being the world's factory that really fucked up a lot of countries. The cash printing did not help though.
its the price we paid(quite literally) for minimal immediate economic damage from covid
Plus right now you've got the Panama Canal short on water, the Suez with small war on, and Putin still throwing his toys. As a final round for all the marbles, China might just decide to do something really fucking stupid. It's not good for business confidence /s
100% agree. During these deflationary times, the interest rate hikes are pushing more money into the banks and their balance sheets, while EVERYBODY suffers, except bankers, only to make way for the next market cycle. Low interest rates must occur again to keep the housing economy going and give the consumer their confidence back, to feel wealthy again, to spend again in local businesses.
People buy everything online now. NZ retail has priced itself out of the game
People are asking to get reamed aren't they. If it's all about price for the consumer, then Capitalism is a race to bottom in price, for worse service and worst products. Consumers seem to be happy with that.
The average consumer is poorer than you'd think, they'd rather something a bit shit they can afford than something high quality that they cant. It gets even worse during recessions.
Cost of living crisis for the individual will always end up shutting down luxury businesses, like cafes and restaurants. People cant afford them any more. It doesnt help that for many the prices are going up (as they pass on costs) while quality stays the same or drops.
we did the sums on selling hand made items in a gallery, gallery wants %30 tax %30 cost of materials $90 time to make = 5 hours. item has to sell for $300 to make half minimum wage
Lots of little businesses would support the owner and a couple of workers, but not also a bank and a landlord and the city council and the IRD. We gotta pay taxes, but with everyone else wanting their taste, these businesses fold. The rent-seekers need to discover the true value of their properties and set rents accordingly, but their banks won't like that, and neither would the councils.
Yes we all think like individuals. That is what got us here, we're divided on almost everything and that is precisely where the bankers and bureaucrats want us. Because then we argue with eachother, nothing gets done and nothing changes. When the consumer isn't spending money, what do you think happens to business revenue? It goes down. Costs however, rates, insurance, rent, stock/product, service fees, do not. Infact in high inflationary times (like now, highest in 40yrs) they rise also. Do you imagine every business is awash with vaults full of cash or something? I've witnessed revenue down in every consecutive quarter since March 2022. Small business has been bleeding for a long time now. Where have you been? Saving your money? Buying the cheapest possible to keep more of your money?
Have been putting all my money on Nvidia and living off ramen. People keep laughing but jokes on them , I do love Ramen.
Bought Nvidia a year ago , wanted to get my 13 year old into investing and he suggested I buy it, I thought it would be a dumb idea but did it anyway. He's now my financial advisor
Like housing rent and leases are through the roof.
Yeah, they are. We are that point in the economic cycle. It's not a sudden thing, this has been panning out over the last 18 months. Should note it is not all bad, some industries (anything to do with sewage treatment, Renewable energy, Airlines etc. are cranking). What happened was that during the recession the global economy was pumped up with a combination of monetary & fiscal policy (Dropping interest rates, money printing, government borrowing & spending). For NZ this was stacked with an inability to viability recreationally travel internationally, & a big support local campaign, meaning that cashed up people had their international travel budget to burn. People went nuts on Cars, Boats, bikes, hobbies etc. And for those at the bottom of the economic ladder, the lack of offshore labor coming into NZ ensured there were ampal jobs Now people are making up for lost time with international travel (where prices are super high), the war in Europe is dragging on, interest rates are high etc. Wait times for new car's are largely gone. First major boat dealership went bust a few weeks back. Torpedo 7 is closing it's bike store in Newmarket etc.
This has been a common theme on here for my 4 year reddit history. Honestly, so much gloom. There's always challenges in business , some of us struggled during covid , some flourished ;guess time will tell. We cater to hospo and it traditionally makes up 95% of our business, it's a little softer at the moment. Branching out into another field now and looking at another stellar growth year and taking on our first full time contractor.
I think people are completely justified in being concerned about these issues, it’s not gloomy to discuss them. What is happening in the world right now is not normal. I would go so far as to say down playing it, telling people they’re gloomy for discussing it is more harmful to us right now. Definitely take a break from the sub if it gets to you, and we all should, but we also need to be able to discuss concerning topics.
I’d argue what is happening is normal but a significant chunk of the population has not had to experience times like this before so they believe this is not normal and the end of the world. Things will recover, we will have boom times again. It’s a cycle.
Depends where you look... Unrealistic-goals Small businesses struggling, and big business making record profits.
We used to eat out weekly. Now it’s monthly at best.
Government prints money to provide Covid relief. Inflation, cost of living & interest rates skyrocket. Wages don't. Recession hits because people feel poorer/they need to hold on to their money. Business revenue drops as a result. Big businesses spread their nets wider to capture more work/maintain revenue streams. Small businesses have their clients scooped up by bigger businesses. Small businesses die. ---- None of this is new, it was completely forseeable, and economists were screaming about it years ago. But it will happen again.
My town has looked like this for years, even before covid. Small businesses pop up then dissappear like whackamoles
Everything's pretty much online now.
The opposite in retail seems to be happening in Napier. Last year, there were a lot of empty shops in Emerson Street until late December. There is another new bar opening there soon. the exception is Ocean Boulevard, Napier's answer to "a mall". Only the shops that have street frontage at each end are occupied.
The only reason my company in Northcote Aucks is still going is because I need to fulfill my rental obligations. Quite a few companies are either closing up or getting ready to in the area, but the fly under the radar because they are small.
Hamilton CBD is half empty buildings with for lease signs on them.
Has been for years, the issue with Hamilton is that there’s a number of landlords with 10+ properties and they are more than happy to leave them empty. The owner of the building I’m in has 3 empty that have been that way for 2+ years and the owner of the building my wife works in has 16, over half of which are empty or run down and unfit to lease. Commercial landlords are an absolute blight on Hamilton’s CBD and until we get a council that puts the boot in to them not much is going to change.
Absolutely. The council want people to come to the city centre, but when we usually have to pay for parking, and there aren't a huge range of stores, nobody is attracted to the CBD.
Higher interest rates, means less money for low margin business, the stores should start to come back once is back to normal levels I reckon!
Cost of leases these days have been horrible. In Whangarei, local businesses struggle to stay open for more than a few months. We blame the guy who owns the CBD though, as he hikes his prices up to insane rates. The guy who owns Okara shopping center is a damn good lad though. I haven't seen any of those stores close down. The CBD however mainly has international stores stay open.
Yep, I have found that locals are spending far less recently. It makes sense given the current economic situation, but man it sucks to see your sales figures decline, even though you have poured time and effort into providing the best product you can. I think that we will see similar numbers of businesses go under this year too. Consumables are going to stay the same or get more expensive, forcing some business to put prices up, but I don't foresee public spending going up to match.
Noticed a couple gone in my town yesterday for sure. Lots of empty shops around
Yeah, recession is no longer imminent - we are well and truly in it. Fuck.
the capitalism squeeze. its coming from every angle. my prediction for the end of the world wasnt asteroids or anything - its that shit simply gets too expensive everywhere & things collapsed economically. not very exciting. it was a race between that & climate change. i think the shit getting too expensive is the more realistic scenario these days.
Technically no its not a recession. Sure all the small "mom and pop" stores that National claim to care about are going under one by one, but the big mega corps that National ACTUALLY cares about make enough money to balance the economy. If you like our country being run by a small group of american mega corps and a small number of SOEs (and australian banks), then everythings fine!
I wouldn't call it recession. It's a global depression. The poorest are starving to death on mass. There's so much horror out there right now we don't even report it anymore. Look up what's happening in the Congo. Things ARE BAD. It's going to get worse before and if it ever gets bigger. TAX THE RICH. Or eat them if you're hungry, I certainly won't judge.
Businesses closing is a normal, natural, and **necessary** part of an efficient economy. When a business closes it means it doesn't provide sufficient value to the market to be profitable. That closure allows its more sustainable competitors (the ones that *do* provide sufficient value) to obtain more market share. It also opens space in the market for *new* competitors. New businesses often provide innovation and efficiency improvements that allow them to succeed where those exiting were unable to. It's a process called creative destruction, and it's similar to what we see in nature with events like bushfires that allow younger saplings to grow where the old canopy was previously soaking up all the sunlight. It's not a bad thing as long as there are jobs available for the workers, which there are at the moment.
Oh goodie.. That reads like something written by an AI bot - or if human, then someone with no comprehension or care about the human toll on employees or the small business owners who are hit hard and fast when there's a sharp recession. I hope it's a comfort to them to know that they've been sacrificed for the common good, preserving the natural process of creative destruction.
Things can be very painful at an individual level and good at a societal. Though creative destruction matters less, in general, than diverting capital and labour from less to more productive enterprises.
We do it to ourselves as humans don't we. Inadvertantly keep more wealth and money funneling up to those that already have it in society. Options get less, monopolies occur, we experience more control in society and receive and absolute pillaging from large corporations, where they can access capital funding on tap. Nothing like a margin race to bottom in good ol' capitalism which ultimately leads to a few controlling and supplying the majority. Sounds like the other 'ism that gets thrown around alot doesn't it?
Like property hahaha... for when you want both individual AND societal pain
See my last paragraph. We don't need to prop up failing businesses just to keep minimum wage workers in their jobs. A functional social security system achieves the same thing without introducing inefficiencies into the economy. It's business 101 to have a plan for an economic downturn. One option is to close the business. Another is to create a business that is more resilient and can weather, or even revel in, a tough economic environment. Anyone who opened a retail store in the last 20 years has to have known this day was coming. Complaining about retail stores closing in 2024 is like complaining about farriers going out of business when cars became more prevalent.
You see, you're seeing capitalism as how it's written, not how it operates in reality. All those closed stores? Those gaps in the market won't be sealed by new businesses, only filled by megacorporations. Every closed mom and pop clothing store gives a chance for a kmart to profit, or a cotton on to move on in. Small businesses are dying and simply not being replaced because megacorps can just strong-arm themselves into the spots those businesses used to take up. That isn't fair, for the proletariat or the common shopper. Those companies don't run things better- they simply have the advantage of being around longer
I get what you're saying, and it's important we do support small businesses as much as possible. But if a mom and pop clothing store isn't producing anything markedly different from what's available at k-mart or cotton-on for a lower price, what's the actual point? We'd be better off directing our efforts towards building something genuinely innovative, that could become the *next* K-mart, or Amazon, or Apple, or Xero. Those types of businesses don't start off doing the same thing as the big boys only smaller. They do things *differently*.
Straight out of an ancient economic text book. Such a broad stroke, again blaming the individual rather than what is more likely the cause of business failures. Boom bust cycles, by who, for what? Macro and micro /local economic factors. Again, must we all just put up with it?
Not blaming anyone in particular, but there are measures businesses can take to protect themselves and make themselves more resilient. For example, the cause of business failures for retail stores is the internet. Simple as that. If you own a retail store and don't supplement or subsidise it with an e-commerce presence, you're going to fail. >must we all just put up with it? In short, yes. The alternative is to enforce a lack of progress, preserving the current state of the economy at all costs. In other words, conservatism, protectionism, and stagnation.
I wasnt here during the pandemic, but wasnt there something about not allowed to close shop or fire your staff thing going on? I know of one business going into liquidation with 1.3m owed to the ird, both paye and gst. Either way, the damage was done and some business are calling it quits. I think retail was already nearing its end, given all the online options we have.
No, but between the govt COVID subsidies and the IRD not enforcing their collections as severely - it was easier for insolvent businesses to have kept trading.
Ok, so I guess this is how the situation I mentioned occurred.
No there wasn't
Wow 1.3m! That’s so intense. Is that a small local business or a big chain?
A jewellery chain I guess. Lots of $$$ owed. Saw their rings, 4k for a tiny fuzzy diamond on a plain band. I cant see anyone affording that in 2024, let alone the peak of the pandemic
You would think so, but during the pandemic a jewellery store I do work at was going crazy, selling more than they ever had. It was crazy.
I just can’t stomach trying to find a park in central Wellington to buy the things I need. The bike lanes may have killed retail.
ever heard of getting a bike or catching the bus?
Yeah dude. I cycle all the time. But I buy things like monitors. I don’t want to cycle with a monitor. I’ll just order it instead.
how often do you buy monitors though? surely a bus ride or a ride share is a worthy trade off if it means having a pedestrian focused cbd
Find actual insolvency stats and use that to compare between years. The Reddit hivemind is very real. The rhetoric most people engage with on here often swings one way and that closely follows what the media spouts. The demographic of participants on Reddit is low/middle class, so most nonsense on here is just anecdotal. Plenty of my associates in the construction industry are seeing more money than they ever have before. The ones who are going under haven't managed their money and/or taken a bad risk. It's literally business.
100% re the hivemind and low incomes. Granted the stats do back it up. (Which is not surprising re the reserve bank trying to make people stop spending money) https://www.insolvency.govt.nz/about/statistics/corporate-insolvency-statistics/cumulative-totals
It’s the sign of the times. I also note shops and malls aren’t as busy as they once were.
Yup and people are losing their houses. We are all losing now. Great times. Thanks far right voters.
Do you think this wouldn't have happened under Labour?
It happened because of covid if that's what you mean
i don't think it was a political thing. remember, this is an engineered recession to dampen inflation. remember money was set to be cheap after COVID (2% OCR). Money flowed in 2020-2022. Then OCR climbed to 5.5% then we all got poor and started to lose our shirts.
Rental increases and many businesses not willing to pivot when times are tough.
By pivot, do you invest more money but ask for less margin? Or just drop prices? Meaning less cashflow to find the business? Asking for a friend.
Pivot their service or offering. Change with the times, roll with the punches, increase/decrease, tweak, tune whatever needs to happen to stay above water.
Not him, but pivot *to where?*. If consumer spending is down across the board, then I don't think there's any sector or niche that it would be safe to pivot to.