Big retailers like Kmart had ‘little impact’ on Ashburton CBD

Nicole Mathewson Reporter from The Press

By local democracy reporter Jonathan Leask:

Large retailers popping up outside Ashburton’s CBD have had little impact on spending in the town centre, according to a new report.

Infometrics was commissioned to analyse how major retailers operating outside the CBD zone were impacting central economic activity, and the wider Ashburton economy.

The report was in response to the Ashburton District Council recognising the potential impact of new retail developments on the CBD.

The developments include the River Crossing precinct, which opened at the end of 2022 with Kmart as the anchor tenant.

On the other side of SH1, Briscoes shifted out of the CBD to set up next to a new Rebel Sport in April, with a Chemist Warehouse opening next door.

Infometrics analysis found that, to date, the value of electronic card spending in Ashburton's CBD has been relatively consistent since October 2021.

“Given inflation over this period, this suggests a slight pullback in real spend per transaction, however, there is no clear effect associated with the opening of Kmart,” the report said.

Total spending, excluding fuel, grocery and alcohol, in Ashburton’s CBD rose 5.6% between the first half of 2022 and the first half of 2023, ahead of the national increase of 3.2%.

Infometrics also found there was little evidence that the introduction of new retailers outside of the CBD hurt overall retail employment.

As of February 2023, there were 1570 people employed in retail in central Ashburton (the CBD area and the fringe retail centres), up 60 people from February 2022.

The report suggested the rise was likely driven by Kmart's opening and associated hiring activity.

Kmart is understood to have added 100 jobs between February 2022 and February 2023, but the net growth being less, a net 55 jobs, “could suggest that other department stores and leisure retailers have either been unable to replace staff lost to Kmart or have otherwise reduced their staffing”.

The report concluded that spending had been similar to before big box retailers moved in.

“Overall the retail sector is under a degree of stress nationally, reflecting the cost of living pressures being borne by households, and the flow on effect to their spending.

“With spending eroded by still-high inflation, modest nominal growth in sales could translate to a decline in real sales.”

The report cost $4000, with data costing $2325.

A report on the impact on the wider Ashburton economy has not yet been received.