Concern grows over empty streets in Newmarket following the opening of mall operator Scentre Group's redeveloped and expanded Westfield shopping mall. Photo / NZME
Expansion of the glitzy Westfield Newmarket mall has had dire effects for some businesses in the area, with once-thriving boutique shopping lanes decimated and the strip littered with empty shops and "for lease" signs.
Retailers, cafes and others in Auckland's Newmarket say they are being pushed out of business after many shops that were once located on the street made the move into Australian mall operator Scentre Group's newly opened $790 million redevelopment.
"For lease" signs and empty shops seem to have become permanent fixtures on Broadway, Newmarket's main shopping strip, and on side streets such as Nuffield St, once known for their thriving shopping lanes.
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One Nuffield St business owner, who spoke to the Herald on condition of anonymity, said the street's remaining businesses were suffering, and claimed that Scentre Group - the street's landlord - would not reduce rents, leaving tenants to bear the brunt of reduced foot traffic following the mall's phased opening in August and November last year.
Ali Arsan, owner of Tasca cafe and restaurant on Nuffield St, has been operating on the street for almost 15 years.
The past 12 months had been the "hardest", Arsan said, as he struggles to stay afloat and come to terms with the fact that "50 to 60 per cent" of foot traffic on the street had now "gone" after the construction and opening of Westfield Newmarket.
"Since they started building it has [affected business], they took lots of retailers ... and once the shops opened there it killed our retail here on Nuffield St," Arsan told the Herald.
"No shoppers are coming here. Our business is really plummeting."
The hospitality venue's turnover had dropped 40 per cent and it had not made a profit since April, Arsan said.
"It started in April, May onwards, going down ... the last three, four months, we are really down.
"A lot of shops, especially on Broadway, closed down and there's not enough foot traffic coming through."
About 10 retailers have closed their shops on Nuffield St in the past six months.
Before mall construction began, some retailers temporarily relocated from the mall to Nuffield St, including Witchery, Trenery, Barkers, Country Road and Seed. These have now moved back to the mall and others have followed, including Huffer, Flo & Frankie, Gorman and Hartleys.
Other businesses on Nuffield St have permanently closed.
Tasca, like other shops on the street, had prepared "as much as they could" for the new mall's impact. The venue employs 28 staff, a mix of full- and part-timers. It had already reduced its staff numbers and faced further cuts, Arsan said.
"[January] should be one of our busiest months, but we're really down."
Arsan said he had spoken to Scentre Group about the situation, and had negotiated a marginal rent reduction in June.
"When we first signed the lease for this place, they promised us lots of things and obviously deserting the street wasn't one of them."
Tasca still has a three-year lease on its site. He said he was disappointed Scentre had "not looked after" its existing tenants.
"I don't know how we are going to survive."
One clothing retailer on Nuffield St told the Herald trade at the store was down by more than 30 per cent.
"Now that the mall is open, we thought things would pick up, but it hasn't, it's got worse," said the store manager, who wished to remain anonymous.
"We're lucky that we have a really strong online presence and loyal customers, otherwise, as far as foot traffic, it is so far down, there's just no one.
"Sometimes you look up and down the street and there is not a soul on the street, and that will be on like a Saturday at lunchtime."
The woman is among many on the street who believe the mall has "sucked the life out of Nuffield St" and wider Newmarket.
"The sad thing is [Nuffield St] has lost its character, it was such a lovely little street."
The owner of coffee shop Little Nuffield is another business on the street that told the Herald it was struggling.
On Boxing Day - traditionally the cafe's busiest day of the year - Little Nuffield's sales were down 40 per cent.
The owner, who did not want his name used, said he believed turnover would continue to fall, as Little Nuffield relied on clothing and other discretionary retailers to draw shoppers to the area, and many of those retailers had already moved away or were in the process of doing so.
"If there are no shops for people to shop around, why would they come?
"The business dries out after 11 o'clock every day. Saturday [sales] have dropped a lot and Sundays have halved."
He said he was worried about the future of the business, after a drop in sales that began last month, and felt helpless.
A spokesperson for Scentre Group told the Herald the ASX-listed mall operator - which owns five Westfield shopping centres in this country - had worked to "support" Nuffield St retailers.
"In delivering Westfield Newmarket, it was always our intention to create a destination that connects and enriches the local community and contributes to a vibrant retail and lifestyle precinct in and around the centre, including Nuffield St," the spokesperson said in a statement.
"We have worked collaboratively with our retail partners in-centre and on Nuffield St to support them throughout the construction and development phase at Westfield Newmarket and will continue to do so as the centre and the surrounding retail and lifestyle precinct continues to evolve."
Scentre did not detail what support had been given to businesses. It has been contacted for further comment.
Ingrid Memelink, owner of homeware retailer Harrowset Hall, said running a business in the area had been "a challenge" over the past three years.
Harrowset Hall had been trading on Nuffield St for 13 years, and the lease on the store was coming to an end "in the near future".
"When the mall first opened we benefited from it, and I think to a degree some of the other [Nuffield St] retailers and coffee shops did as well, because it drew a lot more people into the area to look at the mall, but that petered out," Memelink said.
"Christmas was well down on last year, but we've also got to accept that there's a lot more competition. We've now got a lot more competition for the dollar, plus online, there's a lot of factors that I don't think can be entirely blamed on Westfield Newmarket."
At the end of last year Memelink opened a pop-up store in the mall, the Linen Store, and had noticed that shoppers were now "buying differently" and focused on bargains.
Trading was "still tough" for her business, even the pop-up shop, she said.
Memelink was also disappointed by the "lack of direct communication" from Westfield about its plans and future development.
She said she believed Scentre Group had "sabotaged its own clients".
"It has devalued my business and makes it very hard to plan ahead."
Ben Collins, store manager of long-standing shoe retailer Mischief, on Newmarket's main strip, said there were also retailers on Broadway struggling with a decrease in sales, which he believed was the result of parking problems.
Broadway was quieter than it used to be, as many people now shopped only in the mall, he said.
"The issue is with parking in the new Westfield, you only get two hours free and you can't extend the free parking if you buy something for $10, like you used to [be able to]," Collins told the Herald.
"We used to have a lot more customers that were new to the area coming onto the street whereas now they are just stuck in the mall."
If it was not for "repeat customers", Mischief, too, would be struggling, he said.
Collins believes the high number of empty shops on Broadway is the result of landlords seeking higher rents from prospective tenants now the mall is open, after about two years under construction.
"[Landlords] are thinking more people are coming through, but it is also [retailers] that were originally in the mall moved out on to Broadway and now back into the mall."
Newmarket had lost its "uniqueness" and had become much like other shopping areas in Auckland, Collins said. "It is just becoming like the normal shopping mall shopping areas, [Newmarket] doesn't have the uniqueness that it used to - New Zealand brands, New Zealand-owned businesses - it's now just another corporation."
Mark Knoff-Thomas, chief executive of the Newmarket Business Association, said Newmarket was going through "a period of change", but he did not believe the number of empty shops in the area was at an all-time high.
However, retail vacancy in Newmarket was the highest it had been "in a few years", he said.
"I'm sure that some people will be struggling a little bit because of the fact that almost 200 new stores have opened up," Knoff-Thomas told the Herald.
But he believed the shortfall of people in certain areas of Newmarket was temporary and shoppers would return once initial curiosity about the mall had worn off.
"Research that we've done about large-scale retail development ... shows there is an initial effect where foot traffic is taken into the mall or whatever the development is, but they all come back out again when things start to settle down.
"Newmarket is going through a lot of change, and many brands have moved from the main strip of Broadway into Westfield and we expected that to happen."
Knoff-Thomas said some of the prime vacant retail sites had been leased.
"We're going through a state of change, going from the old state of what we were into the new state of what Newmarket is going to be, and that's obviously causing some impacts."
"I don't think any short-term impact of the mall opening will be sustained long term. Business will come back out and foot traffic will be strong."
Retail NZ chief executive Greg Harford said the redevelopment of malls often became a short- to medium-term problem for high street retailers.
While business often never returned to what it was, Harford said it would bounce back over time and high street retailers in turn would have to reinvent themselves to draw shoppers back.
This was a trend that had been observed overseas after large mall redevelopments in Britain and Sydney.
"The new Westfield development has been a drawcard for shoppers, and we see this has impacted businesses in the surrounding streets.
"A key issue is landlords tend to continue to demand high rents and annual rent increases, even when foot traffic and sales can be declining," Harford said.
"The mall will always attract customers and there's an opportunity for surrounding businesses to take advantage of that customer base.
"It is really important that landlords recognise the commercial realities of the changing marketplace in their rental demands, and that councils do what they can to support high street shopping through the provision of cost-effective parking and a pleasant streetscape."
More than $600 million was spent in Newmarket last year, and this is expected to pass $1 billion by the second half of next year.
But for some retailers outside the mall, there's another challenge coming: Westfield Newmarket's luxury retail section of the mall is scheduled to open in March.
Goods to be shipped from China and Malaysia mainly, but also other parts of the world.