Timaruvians spend a fifth of their fashion and furniture budgets outside the district, transaction figures indicate.
According to a report by Property Economics, the district might have an oversupply of large format retail or “big box” stores.
The report said “leakage” in retail spending on footwear, clothes and furniture to Christchurch indicated “residents are not satisfied by the existing localised offer, with Christchurch having a broader offer and range available”.
The analysis of Timaru District’s retail market, led by the firm’s managing director, Tim Heath, used BNZ MarketView eftpos transaction figures from 2014, statistical modelling of population and spending trends, and an audit of the district’s retail floor space.
It suggests shoppers will spend about $449 million in the Timaru District in 2015. That figure could reach half a billion dollars in 2024 and rise to $567 million by 2033.
Shoppers visiting from outside the district contribute one dollar out of every four spent in the district. Although a quarter of locals’ money “leaked” from the district when they shopped elsewhere, the flow of retail spending into and out of the district was neutral.
Department and grocery stores are the only two sectors studied, which brought a net inflow of retail spending to the district.
Although the Auckland firm’s report suggests a 17,300sqm oversupply of large format retail space exists, it suggests the imbalance could be because of the district’s relatively low rents, allowing “typically smaller store format retailers to occupy larger footprint tenancies”.
If already-consented retail building projects, such as extensions of Pak’nSave and Harvey Norman, and Timaru Property Investments’ proposal for shops on Evans St proceeded, that “would represent a step forward for Timaru” because it would keep more spending in the district.
Property Economics predicted retail spending would grow an inflation-adjusted one per cent annually for the next five to 10 years, rising to between one and two per cent in the medium term.
Although the firm assumes shoppers will continue to shop more online, that will not decrease the demand for shop space.
Property Economics’ estimates exclude spending on accommodation, vehicle and marine sales, hardware, home improvement, building and gardening supplies.
