Wellington 'going through a really tough patch at the moment'

Wellington is going through a "really tough patch at the moment" amid struggles for many businesses and a drop in consumer confidence.

It comes as the public sector is affected by job cuts and the cost of living means people are spending less.

One resident told Breakfast the cost of living in general "makes it hard" to go out and support local businesses.

Owner of restaurant Loretta Hayden McMillan said hospitality is "the soul of any city" — but with fewer patrons through the door, it's a struggle for some to continue.

He said "across the board" they were 20% down on last year.

"It don't think I've ever read so many economist columns and they are all saying the green shoots are there. What's interesting is that this is just a cycle and history has shown us we're at the bottom of the cycle and it's going to come up."

Many of the public sector job cuts — totalling around 6377 according to statements from ministries and the PSA and compiled by RNZ — were in Wellington. Some of that total comes from vacant roles not being filled.

Wellington Chamber of Commerce chief executive Simon Arcus told Breakfast while everyone is doing it tough, Wellington seems to "have that little bit of extra challenge".

He said there seems to be a "heavy change in Wellington".

It felt a little bit like it did during the pandemic, Arcus said.

"Certainly the public sector cuts have stalled things and people have become a bit concerned and there is uncertainty about spending," he said.

"What I think we'll see — people have to spend — things like health and safety compliance is a really good example, you can't hold off doing that with your staff forever and I think people almost have to relearn to spend, relearn to get get over the shock and get back into a sense of celebrating the city.

"It is a great city, it's just going through a really tough patch at the moment, we've got huge optimism for the future though."

The latest hospitality report from the Restaurant Association showed a 5.5% drop in sales in Wellington in the first quarter of 2024, compared to the same period last year.

Nationally there was growth of 5.6%.

Westpac's latest consumer confidence survey showed confidence in Wellington dropping from 90.1 in March to 79.3 in June. The average was 111.4 — over 100 means optimists outnumber pessimists.

Arcus said Wellington typically celebrates itself as the creative capital — and having a vibrant hospitality and retail sector was crucial to sustaining that.

"You've got to have the hospitality and retail jobs to have those creative people that live here … they often use those jobs to fund their passion and go out and work in the arts.

"We do think that the creative side of the city is going to be a really important part of getting it back on its feet."

He added while the future looks hopeful for those industries, at the moment they are too feeling the pinch.

"It's pretty broad based. We're really looking forward to that turnaround."

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