August 10, 2025 • 32 mins
They are some of the biggest industries affected by a slumping economy, so how are they holding up in 2025?
Unemployment and inflation have both risen in the latest updates, foot traffic in the Wellington CBD is still down, and both sectors are about to be stung with increased costs as the government bans contactless payment surcharges.
So, how are retail and hospitality operators feeling, and are they hopeful for something of an economic recovery by year's end?
To answer those questions, Hospitality NZ chief executive Steve Armitage and Reatil NZ chief executive Carolyn Young joined Nick Mills for the Business Panel.
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Speaker 1 (00:09):
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Speaker 2 (00:27):
Let's get down, let's get down to business. Give you
monnight mo night characters. You've had a million million nights.
Just slight person, so let's get down. Let's get down
a person.
Speaker 3 (00:43):
Join us for our business panel this week. And I
really enjoyed this. Part of the show is Hospitality New
Zealand CEO Steve Armitage. Steve, welcome to the show.
Speaker 4 (00:51):
Good mornings.
Speaker 3 (00:53):
How how are you feeling a bit cold out there?
Speaker 5 (00:56):
It is bracing out there in the elements here, so
I just find down from Auckland, so it's just as
cold up there. Dough to be fair, but a bright
blue sky to compare with the gray O.
Speaker 3 (01:06):
What's apparently supposed to lighten up? And we'll we'll I'm
going to get into lots of conversation with you and
Retail New Zealand CEO Carolyn Younger, Morning, Carolyn.
Speaker 6 (01:14):
What in a nick? How are you doing.
Speaker 3 (01:16):
I'm doing great now. I walk down Lampton Key on
Saturday and I thought about you. I thought, by god,
you know, I know personally how tough it is in
my industry, but I don't think i'd like to own
a small I don't think i'd like to be vance
Vivian Right now. In Wellington there was just no traffic.
Speaker 6 (01:37):
It's really tough, right and when you've got me. We
had a particularly cold weekend with highs of five and
six degree, wintil factors of about one percent, and it
doesn't entice people out, but you know, there are some factors.
Sometimes it's you know, you've got to pay for parking,
you know, being able to access into the city. It's
got to be easy for people to want to come in.
(01:58):
And we're doing that off the base where it used
to be free weekend parking and so people would come
into the city and they could park, and they could shop,
and they could go to lunch and have a great
time in the city. And all of those things feel
too hard. And I've had people telling me they spend
more time going out into the suburbs or going to
the malls because it's easier.
Speaker 3 (02:17):
Do you remember when Saturday mornings used to be an event.
Saturday morning of walking down you know, Queen Street or
Lampton Key with your parents used to be an event.
Go out and buy a new pair of jeans and it.
Speaker 6 (02:30):
Ages us a little bit. But I remember when shops
didn't open on the weekends.
Speaker 3 (02:34):
Yeah, I don't want to talk about that. It's good. Yeah,
but do I remember that too? But I was like
four years old, Steve tell me, I mean, you're at
Auckland based, So is it the same in Auckland as
Wellington got its own because everyone thinks that Wellington's got
trials and tribulations on their own.
Speaker 2 (02:51):
Yeah.
Speaker 5 (02:52):
I think for the last eighteen months to two years,
Wellington has borne the brunt of the commentary around the
struggles of hospitality very well traversed territory, around government cutbacks,
the reduced number of public servants and just the reduced
football in the city center here. But in recent times
Auckland has also started to find things they're going pretty tough.
Speaker 4 (03:14):
There's a huge.
Speaker 5 (03:15):
Amount of reliance on the CRL and nz ICC convention
center opening in Auckland, but ultimately they're still lacking an
incentive to get people into the city. You need an occasion,
You need events to stimulate that foot traffic because as
Carolyn's just touched on, accessibility and the cost to get
into venues is increasingly difficult for people.
Speaker 3 (03:35):
Tell us right now, how you're feeling hospitality is what
sort of state is hospitality? It's only feels like yesterday.
I was talking to carry Print of Gas on the
show Dame Carey Print of Gas, when she was in
charge of tourism. She was telling me tourism hospitality was
actually more of an income earner in New Zealand. Dan
(03:56):
Derey was.
Speaker 4 (03:58):
Well, that was the case.
Speaker 5 (03:59):
It's clearly not at the moment, and there is a
synergistic relationship between tourism and hospitality. We are seeing ongoing
struggles in the hospital sect because those visitor numbers just
haven't rebounded in the way that we need them to.
So the recovery of the tourism sector does give me hope,
because we're still only that sort of eighty six eighty
seven percent of the capacity of tourists we had prior
(04:20):
to COVID, So as that number starts to inch arpe,
I think that'll provide some relief hospitality operators. But at
the moment, we're heavily predisposed to the challenges that most
households are finding, and that household income and the pressure
that's on that at the moment is meaning that that spend,
that luxury spin that people have for going out is
(04:41):
just isn't there.
Speaker 3 (04:43):
Carolyn, You'll be feeling exactly the same for retail or
I'm not going to put words in your mouth. I mean,
how is retail right now, right in the middle of
the winter.
Speaker 6 (04:50):
Yeah, it's dark, you know, it's really difficult. All kind
of Wellington are particularly challenging. There are some small areas
in the provinces governed by that rural factor that are
doing a little bit better where the money from darereas
flowing back into their local environment. So that's holding some
businesses up in terms of those spaces. But largely we're
(05:13):
just hearing that sporadic trade where you know, one day
doesn't follow the other, and you know, it's just really
hard to get a sale and to be successful. We're
still seeing lots of businesses close and largely you know,
can't negotiate leases when they come up for annule, so
can't get it at a reasonable price that with rates increases,
(05:35):
you know, the cost of payments, the cost of insurance.
People are saying, we just can't see how we can
make ends meet and survive until things turn around. So,
you know, we had the thing in twenty twenty four
about you know, survive to twenty five, and now it's
all about surviving in twenty five. And I don't see
much light at the end of this year. It's going
(05:57):
to be next year before we start to see any
economic change. That's going to mean that households feel that
they can come into town and go out to lunch
and go into the stores and buy things.
Speaker 3 (06:07):
But we kept on telling get being told that second
half of this year. Are you saying it's not second
half of this year.
Speaker 6 (06:13):
Look, we've got one more rates cut likely probably in
this reserve bank cycle.
Speaker 3 (06:18):
In this month.
Speaker 6 (06:19):
They're going to do another probably twenty five basis point cut.
They have signaled they're not looking at doing any further
cuts for the rest of the year. So where we're
going to get the stimulus. Consumer confidence is critical to
both hospitality and retail. Consumers are feeling uncomfortable about job security.
If you don't have job security, you're not going to
go out and purchase things. Mortgage rates are still high.
(06:40):
The cut that the Reserve Bank is going to do
is already bought into the priced into the mortgage rates
at the moment, is what we're being told. So just
finding out where is that relief for consumers. If we
don't get consumer confidence, businesses won't be able to turn
around and they won't survive.
Speaker 3 (06:57):
Through Steve Armitage, we were told over the weekend. Well,
I read over the weekend that we've been told. You know,
if Dairi's doing well, New Zealand's doing well, back off,
stop moaning about the price of your butt because of
dairies doing well. Who cares? We're all doing well? Is
that right? As far as hospitality in New Zealand's concerned.
Speaker 5 (07:17):
Look, it's hard to compirm that in a general sense.
I think if you look at the performance of hospitality
operators in the South Island, you could certainly make that link.
Speaker 4 (07:25):
Clearly.
Speaker 5 (07:26):
You know, their economy is heavily predisposed to the agriculture sector.
We're seeing strong performance on the West Coast, We're seeing
strong performance in Canterbury and the lower South Island. So
you'd have to say, you know, you could draw a
link between the two. On that basis, it's really the
major centers, Wellington and Auckland where the going is the toughest.
And I'm sure we'll get to a discussion around this,
(07:48):
but that need to invest in events to try and
drive visitation is what's really missing at the moment.
Speaker 3 (07:54):
Can I just ask you on the christ Church you know,
because everyone in hospitality is saying they're doing really well.
That is that because they are a progressive and rebuilding
city as well as the farming. I mean they are.
They've got your universities doing well. Everything seems to be
on a high And I'll come to you Carolyn on
that too. Is that something that we could look at
and say, well, christ you just doing okay?
Speaker 2 (08:15):
Yeah?
Speaker 4 (08:15):
I think so.
Speaker 5 (08:16):
Clearly they've had their challenges to overcome over the of
course the last ten to fifteen years, but they're now
making every post winner.
Speaker 4 (08:22):
The fact that you've got a council.
Speaker 5 (08:24):
And the council entity itself seems to be really well
joined up and clear on what their vision is for
the city. Every time I've gone down there in recent times,
I've been surprised with the footfall and the positivity around
the city center. Itself, and then you throw on the
likes of Takaha Stadium coming online and hopefully a program
of events which we'll see that really showcase the city.
(08:46):
There's a lot of optimism in around Cantererbre at the.
Speaker 3 (08:48):
Moment, Carolyn, are you hearing the same thing in retail?
Speaker 2 (08:50):
Yeah?
Speaker 6 (08:51):
Absolutely. Look and to Steve's point, they've gone through, you know,
ten to fifteen years of really difficult times and the
city is now beautiful right and largely rebuilt, and so
their pipes are all done and all of their infrastructure
work has done, which we can't say the same and
other major cities around the country. And they are still
(09:11):
supported by that dairy which is flowing and through. And
they did have an influx of people post COVID. Lots
of people from Auckland moved down to christ Church and
found opportunities there that they felt were better for them
and their family after you know, going through COVID, people
had a look at themselves and of determine what they
wanted to do next. So certainly it's more positive and
(09:33):
buoyant in christ Church than it is in other parts
of the country. And you know, Auckland is a really
critical part to the country, So dairy, we can't say
that dairy is not important. But Auckland likewise is also
really important because of the sheer size of the city
and the volume of the GDP that the percentage, it's
something like sixty percent of the GDP comes out of Auckland.
So if Auckland's depressed, they've got a higher level of
(09:54):
unemployment than the rest of the country on average, then
you know we're going to struggle as a country too.
And you ask individual people how they're doing, they're not
going to say they're doing great.
Speaker 3 (10:06):
Right now, Business Panel today you have Steve Armitage and
Carolyn Gray Carolyn right young, sorry Carolyn changing your name. Now,
State of the Economy. I want to talk a little
bit more about what you said was sir, Carolyn survived
to twenty five. I honestly think we're going backwards. What
is your feeling, Well.
Speaker 6 (10:26):
I think it's the compounding factor, right, It's that we've
had a long period of time where where businesses are
really struggling in New Zealand, and so if people aren't
making a profit and they're making a loss, it is
compounding and so it does feel like you're going backwards.
Speaker 3 (10:42):
The comparative numbers.
Speaker 6 (10:43):
Retail cyclical, so we look at year on year numbers.
So if you look at July versus July twenty twenty four,
the numbers are there or thereabouts, but we're off a
really low base and it's been really challenging. So if
businesses weren't making money last year or the year before,
they're not making money this year. It does feel like
it's getting compoundingly worse. And sometimes there's additional factors that
(11:04):
come in that you had more of an impact on
business or just more on morale as well, around how
you can keep being buoyant in a tough environment.
Speaker 3 (11:14):
Well, you've got to love what you do, Steve, don't you.
Speaker 5 (11:16):
Yeah, Well, I think going backwards is how most households
feel that the narrative that's out there and the government
has been pushing it, is that with the interest rate cuts,
there's some additional spend coming into each household, a little
bit more discretionary expenditure, but of course the cost of
everything is going up at the same time at an
increased rate, So although you know you might be getting
a few more dollars in your pocket, that's going out again,
(11:37):
and increased insurance premiums and other things. So most households
I don't think buy into that narrative that the government
has been running around some additional headroom and your expenditure
because it's just simply not the truth.
Speaker 3 (11:49):
But I mean in your industry too, hospitality, if they
look back on last year, they're going to probably I mean,
that's no point looking at those figures, like Carolyn said,
because they were tough. I mean, if you put your
figures from July twenty five to pre COVID July, what
would many of them say?
Speaker 5 (12:06):
Oh, yeah, there's no comparisonolutely right. I mean I have
some hope, you know, And I think it's really important
that we don't just perpetuate this negativity, right because part
of why I think we have a struggle getting young
people to come into the sector is because if you
pick up the paper day to day, all your reading
is negative commentary around the current state of the sector.
(12:27):
So if I think forward, if I'm looking at summer,
you know, we know, as Carolyn's just alluded to, with
retail hospitality is very cyclical. Were expecting to spend over
that period from a domestic visitation point of view, and
with increasing connectivity to some of those major international ports,
through through more flights coming in a reasonable cruise season,
(12:47):
and other things that gives me some comfort that summer
should be reasonably stable for most hospitality businesses.
Speaker 3 (12:52):
Can I both ask you both very quickly? I mean,
looking forward? What is the industry? What are your people?
What are your foot soldiers that own small retailers or
you know, what are your foot soldiers telling you? Karen?
Speaker 6 (13:05):
Look, The challenge I think is Steve outlined is some
of the ongoing expenditure increases they've seen on things that
they can't control. When you look at insurances, leases, rates, wages, payments,
all of those things, that's been really challenging. Businesses are
still inspired by the work they do, and they've still
you know, they have bought stock for summer and paid
(13:27):
for it already. You know, spring stock is arriving in
store already. Summer stock won't be far behind. So they
have to make it work. Businesses are really inspired, and
how do they make it work? Because they know they've
paid for the stock and it's coming in, so they've
got to find a way to stay open, hopefully get
through summer, and then the economy might have turned a
little bit more by then we've got a launching pad
into next year. At some point we are going to
(13:49):
see that positively turn around. And how prepared we're going
to be for that, and what initiatives we're going to
have in place to ensure that we can continue to
thrive going forward will be really important.
Speaker 3 (14:00):
Steve, your industry are you seeing because we're not seeing
it in Wellington. We're seeing people buying old cafes and putting
a coat of paint and few tiles and changing the name.
But it's been a while since we've seen a million
dollar bill. I mean, and that you well know was
happening every week all over New Zealand.
Speaker 5 (14:18):
Yes it was, yeah, and there are there are still
instances of that happening in other parts of the country.
It's not the case here, yes, but there are certainly
some confidence in other areas and investment of reasonably significant
nature taking place. But you just come back to the
point around where things are sitting at the moment. I
think the recent announcement around the merchant fees and surcharge
(14:40):
right now that has a huge impact on the bottom
line of a lot of our members. Speaking to one
last week who saying you know, the cost and position
of having to absorb that into his business is around
ninety thousand dollars a year, nineteen or nine zero. Right, Wow,
the annualized profit for that business is one hundred and
thirty five if you're you know, that's a huge whack
(15:01):
out of the profitability of that business just through one decision,
which seemed to me to be very rushed.
Speaker 4 (15:06):
There was a very little.
Speaker 5 (15:06):
Consultation about it, venient line publicly to so this is
going to help your pocket, but the reality of that
is really tough for business.
Speaker 3 (15:15):
And can I just ask you what the reality of
that transpires to?
Speaker 4 (15:20):
What's going It's going to mean that prices go up?
Speaker 3 (15:23):
Yeah, they can't absorb that, No they can't. How can
any business absorb? And it's retail as well.
Speaker 6 (15:28):
Absolutely the same, you know for a small retailer. And
it is really a play for small businesses because the
bigger guys have been able to negotiate better rates. We
know that forty percent of transactions that go through through
the switch are if posts and so they are free
of charge. But then that means that sixty percent of
the transactions that go through are not free and so
you know, the current legislations enables retailer or a hospitality
(15:52):
business to recoup that through a surcharge, and just removing
that point blank and saying that businesses have to absorb that.
It's not thinking through some of the repercussions, and there's
some unintended consequences in that. We're going to see an
increase of contactless payment occur across the network, so more
funds and fees will go to banks and credit card companies,
(16:14):
and that will mean that less transactions go through the
FPOs switch, So a higher percentage of transactions will incur
a fee, so that that business that's incurring a ninety
ninety thousand dollars fee now will probably rise by between
forty and sixty percent, So they're going to go up
to one hundred and thirty thousand dollars or more. And
(16:35):
what's going to happen is that they're going to be
in a break even space. So the only way that
businesses can small business especially can survive through that is
to change price, because that's the only lever they've got.
So it becomes an inflationary measure. And you know, we're
going to be lobbying really hard through the consultation process
and select Committee to really make sure that government understands
(16:56):
the impact on small business and New Zealand is made
of smeeths. We've had a whole range of different people
outside of retail contact us, you know, from panel beaters
and Canucks and really small businesses that use payments as well,
but they're not viewed necessarily in hospital or retail, but
they are a merchant and so they understand the cost
(17:17):
that's happening and how it impacts their business.
Speaker 3 (17:20):
So right across in the Business panel for our every
second Monday, and we have Hospitality in New Zealand CEO
Steve Armitage and Retail New Zealand CEO Carolyn Young. Let's
talk about foot traffic. I'm going to come to you
Steve first one n CBD foot traffic is nowhere near
pre COVID levels. How much do you reckon that is
(17:40):
directly hurting hospitality in retail? Now, if I want to
go out and buy a shirt, I'm going to drive
into town and I know where I want to buy it,
so I'm going to do it. If I want to
go out for a meal or a drink, I know
where I want to go. Is am I making it
too simplistic?
Speaker 4 (17:55):
No, you're not.
Speaker 5 (17:56):
No, but foot traffic is absolutely hurting our sector. You
can see it day to day just walking here. You
know that there just aren't people around to sustain the
businesses that their doors open at the moment. So until
we find a way to incentivize people to come back
in on a regular basis, those businesses are going to
continue to find it tough. Now, Wellington, New Zealand and
(18:16):
other entities like it up and down the country, part
of their remit is to incentivize visitors to come into
the region. The city center is a key part of that.
I have some sympathy for the likes of Wellington en
Z because due to cost pressures, councils have had to
put investment into other areas. Literally in Wellington the pipes
underneath our feet. It's meant that there's less funding going
(18:39):
towards the likes of a Wellington n Z to try
incentivize visitors to come into market. So that lack of events,
those lack of activations that you might have been accustomed
to in past times are certainly hurting and week to
week are meaning that we're just not getting the number
of people into the city that we'd like to during
the day.
Speaker 3 (18:57):
Carolyn, is there any more than we can do to
get people in? Look, it is.
Speaker 6 (19:02):
Really difficult right unless people are coming in. We know
that people's shopping head of its and retail have changed,
so their first border call is generally looking online and
doing research online then coming into store. But if you
have more people working in the city, naturally they're going
to go down Lempton Key, They'll be down Wallow Street,
they'll be along the terrace, they'll get a coffee, they'll
buy lunch, they'll see something in store and they'll come
(19:24):
back and they'll buy it. So if you're not here
and you're not flowing through, then you're not going to
have those purchases. So I do think it's important that
people get you know, that we get people back working
in the city, and then it's about changing habits. People's
habits changed after COVID and they haven't come back out
as much as they have previously. So it is you
(19:44):
know what doll we do? You know, what are the
events that we can bring on. We know that Wellington Visa,
Wellington on a Plate is on at the moment. It's
a great event. It's you know, one of the largest
hospitality events and around the Oceania region. It's a really
great thing. But what's next, what's going to bring people
out next month and the month after and the month
after that. Because those things we know, WOWE is really
(20:05):
great for retail and it's probably good for hospital as well.
So really having that catalyst and that flow of events
across the city and needs to be replicated across the
country because events are really critical to bringing people in,
whether the international tourists or domestic terrorists.
Speaker 5 (20:22):
We've advocated alongside other associations for some time now for
a form of accommodation levy to be introduced so when
international domestic visitors are moving around, there's a small surcharge
on the bill which would raise a significant sum of
money that would be reinvested in the region that it's
generated in and it could go towards destination management, destination marketing.
So provides a war chest if you like to be
(20:45):
able to invest in major events which the city is lacking.
Speaker 3 (20:49):
Right tell me about you both would have discussions with
both the councils and government. I mean, Steve, have you
mentioned have you had the discussion with government about trying
to get the government workers back working in the offices.
Speaker 4 (21:02):
Yep.
Speaker 3 (21:02):
Yeah.
Speaker 5 (21:02):
And when the announcement was made or some eighteen months ago,
now twelve months ago, specific to Wellington that public servants
were going to be spending more time in the city center,
they were being instructed to come back into work. Know,
we welcomed that decision. We thought it was an important
statement by the government. It hasn't resulted in a significant
(21:23):
uplift and spent. I don't know that the behavior is
actually reflected in the day to day realities of those
of the ministries and departments around Wellington.
Speaker 3 (21:31):
Carolyn for retail, is has it helped or is it hindering?
Speaker 6 (21:34):
Well, we haven't seen it up tick yet. And I think,
you know, the government is one part of that. And
then you know, you think of all the commercial businesses,
the law firms, their accounting firms that you know, every
other business, architect firms, you know everyone. We need all
of them to be coming into the city and to
be getting back to those habits that we had pre COVID.
Speaker 3 (21:52):
So you know, is it a reality? Sorry to interrupt there,
but is it now just becoming I can hear our
listeners say is that just now a reality and that's
not going to be fixed.
Speaker 6 (22:02):
Not necessarily. If businesses see value in having their workers
in their in sit to being able to engage with
each other and work more efficiently and effectively, they'll encourage
them to come in. So I think it, you know,
I think it depends. It doesn't have to be that
everybody works from home. I think, you know, you can
be more efficient and effective if you're working in person.
Speaker 5 (22:24):
Yeah, I think culture suffers when you don't have your
people together on a regular basis. You can't build culture
through a screen, in my view, you have to have
people physically co located in getting to know one another
and understand that they know what purpose they're working towards.
So I think we've suffered as a result, and it's
one of the struggles that we have around our sector.
(22:45):
Holding on to talent is a real bugbear, and I
think you're finding young people in particular don't have that
sense of attachment because they're not used to in general sense,
they're not used to working as part of a team.
They're doing it remotely, and so as a result, they
don't see themselves investing in the long term, and a
lot of businesses that could be benefiting from retaining that talent.
Speaker 3 (23:05):
And could it change people's habits. I mean all three
of us grew up by going on a Friday night
to have a bear with your workmates and meet new
people and get out there and be part of life.
I mean we've all got probably lifetime friends that we
met at a pub that had nothing to do with
work or sport. Is that hurting us?
Speaker 4 (23:23):
The one in my mind view? Yeah, Like I say, I
think culture is critically important.
Speaker 3 (23:28):
Now.
Speaker 5 (23:28):
It doesn't mean you always have to be having a
drink in your hand to build culture, but the opportunity
to socialize and get to know one another, understand what
makes each other tick. How you can get the best
out of somebody just through a conversation I think is
lost when you're doing it arbitrarily through a screen and
you've got to fix time for a meeting.
Speaker 6 (23:44):
And look, things happen organically right in an organization. So
those organic conversations, and you know, it's the water cooler conversation,
right that you wouldn't have found out something like oh wow,
I didn't know that you did that. Oh we must
connect up because I'm doing a piece of work, and
I think it aligns with what you're doing. I better
make sure that I've covered off what you need to
have at your end as well as what's happening with
other people. So you know, being in the office provides
(24:08):
those opportunities and that just gives sustainability to cities and
we can all thrive rather than the struggles that everybody
seems to be having at the moment.
Speaker 3 (24:19):
Business Panel with Steve Armitage and Carolyn Gray. Can I
just ask you Steve, firstly, you probably saw the front
page article in the Post on the weekend about how
difficult Wellington City councils making it for liquor licensing in
this city. Can I give you an example. We have
a little room at a restaurant, a little little area
at the back of our restaurant's a bar, private bar,
(24:40):
and we wanted to change the side door of it
to allow people to go in the doors. They have
to come through three and a half thousand dollars to
do an amendment to a license to change an entrance
to a doorway.
Speaker 4 (24:52):
Yeah.
Speaker 5 (24:52):
Look, this issue routinely comes up, but there's no question
Wellington has been the loudest in terms of the cost
impact for business and a sense that there is a
slightly different view being taken by those involved parties here
the relative to other parts of the country. So we've
provided our Minister regular examples of businesses that operate in
(25:13):
Auckland and Wellington other parts of the country. They're putting
in the same information. They're getting their license in Auckland,
but there's hurdles that have been put in front of
them in Wellington. And then you've got the cost of
friendship too. You know, it's more expensive annually to get
a license here in Wellington that it is in Auckland.
Speaker 3 (25:29):
So I'm not sure that you know. But if you're
got to go for a four o'clock license in Willington now,
they just put the price up to ten thousand dollars.
Speaker 5 (25:35):
So we've asked the Minister to look into this. We're
hoping that we're going to be put in front of
the Ministry of Regulations for an opportunity for this to
be looked at in detail.
Speaker 4 (25:44):
That what we would like to see is just some consistency.
It shouldn't have regional variation.
Speaker 3 (25:49):
Are you hearing the same caarent Are you hearing that
your people in retail are having more difficulties with Wellington
City Council than anywhere else in the country.
Speaker 6 (25:56):
And not specifically. No, we know that the RMA is
a really big challenge and it's a really big barrier
to opening news stores and it just puts lots of hurdles,
cost time, and you know, people consider whether or not
it's valuable. So RMA is a big barrier to entering
(26:16):
the marketplace that we haven't heard that there's a differential
in terms of Wellington City Council.
Speaker 3 (26:20):
Okay, let's talk unemployment. The unimble employment rate came out
last week. It's now five point two percent, with many people,
especially young people, especially young people out of work. Steve,
are you seeing this in hospitality? What's the vibe like
about getting young people to work?
Speaker 5 (26:36):
Well, there are certainly jobs available in hospitality. If I
go up and down the country, I look, there are
vacancies there. What I think is part of the problem
is that there is an expectation amongst young people that
they should be working at a particular level and earning
a particular amount. There's not so much of a responsibility
on them to prove their stripes, to get to know
a business and work your way up so I think
(26:57):
I think there's this mismatch between people's expectations and the
reality of starting and forging a career. That's something that
we need to overcome. Is also a challenge for us
in hospital you know, we've talked earlier about the fact
that if you're opening up the paper and you're reading
negative headlines all the time, it's a hard ass to
try to sell that when businesses are doing it particularly
(27:19):
tough and you don't know if the business is going
to be there in the long run. But also parents,
you know, I think there's some responsibility there. Hospitality has looked.
Speaker 4 (27:26):
At as a as a.
Speaker 5 (27:28):
Brief stop on the way towards doing something different. Now,
I think hospitality can be a hugely rewarding business career
for people. It can take you all around the world.
Speaker 4 (27:37):
It could take you.
Speaker 5 (27:37):
Into business management, ownership and so on. And we don't
see it celebrated in the same way that you do
in the Northern Hemisphere, where people work in hospitality and
are still waiting startus well into their seventies. But we
just don't treat it the same way.
Speaker 3 (27:50):
Yeah, same with retail, isn't it, Karen.
Speaker 6 (27:52):
Yeah, Look, perception of working in retail is the same.
It's not great. And one of the things that we
know that working in retail can do. Look, everyone has
to start at the beginning, and the beginning is often
the shop floor, so most people don't start higher up,
especially when you're young. Right as you say, you've got
to earn your stripes. But the thing about working in retail,
and I'm sure it's similar in hospitality, is that if
(28:12):
you're enthusiastic goods, you're a quick learner. You know, you
turn up, you do all of those sorts of things.
Acceleration through to leadership happens really quickly in retail and
there's really a lot of opportunities. And then secondly, in retail,
you know some of the bigger operators, you can do
almost anything. You know, you could be a buyer, you
(28:32):
could be buying things internationally. You could be doing marketing,
you could be doing health and safety, you could be
doing technology. There's a whole range of things, and it's
not a linear start at this point and finish at
that point. You can go, you know, you can transverse
a whole range of different things in retail. And we've
got a really interesting program that we're doing seven jobs
and seven days in TikTok so for young ones, have
(28:53):
a look at it. It's a really great way in
which you can see what retail could look like if
you're young.
Speaker 3 (28:59):
And you know, the other thing for both your industries
or our industries is social media. I mean, you know,
so the growth of social media. I know hospitality has
been quite slow to pick up on it, but it's
massive now. Same with retail. I mean for young people,
they're so damn good at it.
Speaker 6 (29:16):
Night yeah, I mean there's lots of skills that young
people are really amazing at, but just widening their thought
around what a job and a career in retail could
look like as the key thing. And making sure that
people don't think that your job has to start and
stop on the shop floor. There's so many more things
that you can do.
Speaker 3 (29:33):
Okay. As we wrap the business panel up, we ask
our guests what they would do to I don't know
if Steve, if you had to meet someone and go
out for lunch or dinner or do something in Wellington,
I mean you are an ex Wellingtonian, but your CEO
of hospitality in New Zealand, you want to really impress someone.
What are you going to do.
Speaker 5 (29:52):
I'm going to avoid that because I can't afford to
pick a memo over another. I am an outdoors kind
of guy. I really enjoy Wellington on a good day,
don't we all. But I quite like going around the
fort battlements, up around merym upinentually there watching bay. I'd
love to take my daughter there. We haven't had a
chance to do that yet. It's certainly a high my
(30:13):
agenda to take around there.
Speaker 3 (30:15):
Do you still enjoy Wellington? When you come to Wellington?
You come here very very often. It's not like you're
a stranger. Do you still enjoy it?
Speaker 5 (30:23):
Wellington is different to the rest of the country. I
particularly enjoy Wellington during the summer months. I love walking
around the waterfront. I like feeling connected to decision making
down here. I would like to see more of that
decision making rather than obfuscation. But no, I do enjoy Wellington.
I enjoyed living here for a period of time, but
Auckland was always calling me back home for family reasons.
Speaker 3 (30:44):
Okay, Carolyn Young, you looked as much as shock as
I did over that. It wasn't a great shining example
of great Walingtonia. But you are a Waliingtonia. What are
you going to do with that special person you pick
up at at the airport tomorrow.
Speaker 6 (30:58):
So what we do is we'd swing by Cafa Ice
pick up a coffee. They are really great. They give
you a discount if you've got a takeaway cup, so
you at your own cup. So we'd go in there,
get a coffee. We'd go up, we'd high cup Mount
Kalkau to you know, actually see the whole traverse everything.
We love that walk down. Then when we come down,
we would stopping at Dunche's Delly for lunch, so Craig
(31:21):
would look after us, have great food there, and then
we'd go into the Candala CBD. You go and see
Sheila at Hamilton, Money at Murray. You'd go into TP
and you go into Gubs Shoes and then probably pick
up some flowers from the local candalad area on the
way out.
Speaker 3 (31:34):
You're a Candala girl. Craig Dunshare, that's a name that
from the past. That's the old neo cafe guy. Isn't
it used to play lock for Wellington Rugby? You look
more information? I should be a talkback coach.
Speaker 6 (31:45):
Didn't Hospitality ask him for the recipe for that Karen
was Slice.
Speaker 3 (31:50):
Okay, I've never been up there, but I will definitely
now that I know that he runs. I never even
heard of it before. Hospitality in New Zealand CEO, Steve
Hamat to take you and thank you for everything you've
done for Hospitality New Zealand and your role there. I
know you're moving on.
Speaker 4 (32:02):
Thank you.
Speaker 3 (32:03):
You spoke too soon about my voice, Carolyn, so I
appreciate and good luck on your new job at Sale
in New Zealand. Thank you, Carol Luk. Always good to
catch up Boston. Do that well this year Today Carol
Young's and x CEO of The Pulse.
Speaker 6 (32:16):
They made the playoffs. Still a good start.
Speaker 3 (32:18):
Right, didn't quite go the Pulse didn't quite want to
go the same. Thank you both so much.
Speaker 1 (32:23):
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Speaker 2 (00:27):
Let's get down, let's get down to business. Give you
monnight mo night characters. You've had a million million nights.
Just slight person, so let's get down. Let's get down
a person.
Speaker 3 (00:43):
Join us for our business panel this week. And I
really enjoyed this. Part of the show is Hospitality New
Zealand CEO Steve Armitage. Steve, welcome to the show.
Speaker 4 (00:51):
Good mornings.
Speaker 3 (00:53):
How how are you feeling a bit cold out there?
Speaker 5 (00:56):
It is bracing out there in the elements here, so
I just find down from Auckland, so it's just as
cold up there. Dough to be fair, but a bright
blue sky to compare with the gray O.
Speaker 3 (01:06):
What's apparently supposed to lighten up? And we'll we'll I'm
going to get into lots of conversation with you and
Retail New Zealand CEO Carolyn Younger, Morning, Carolyn.
Speaker 6 (01:14):
What in a nick? How are you doing.
Speaker 3 (01:16):
I'm doing great now. I walk down Lampton Key on
Saturday and I thought about you. I thought, by god,
you know, I know personally how tough it is in
my industry, but I don't think i'd like to own
a small I don't think i'd like to be vance
Vivian Right now. In Wellington there was just no traffic.
Speaker 6 (01:37):
It's really tough, right and when you've got me. We
had a particularly cold weekend with highs of five and
six degree, wintil factors of about one percent, and it
doesn't entice people out, but you know, there are some factors.
Sometimes it's you know, you've got to pay for parking,
you know, being able to access into the city. It's
got to be easy for people to want to come in.
(01:58):
And we're doing that off the base where it used
to be free weekend parking and so people would come
into the city and they could park, and they could shop,
and they could go to lunch and have a great
time in the city. And all of those things feel
too hard. And I've had people telling me they spend
more time going out into the suburbs or going to
the malls because it's easier.
Speaker 3 (02:17):
Do you remember when Saturday mornings used to be an event.
Saturday morning of walking down you know, Queen Street or
Lampton Key with your parents used to be an event.
Go out and buy a new pair of jeans and it.
Speaker 6 (02:30):
Ages us a little bit. But I remember when shops
didn't open on the weekends.
Speaker 3 (02:34):
Yeah, I don't want to talk about that. It's good. Yeah,
but do I remember that too? But I was like
four years old, Steve tell me, I mean, you're at
Auckland based, So is it the same in Auckland as
Wellington got its own because everyone thinks that Wellington's got
trials and tribulations on their own.
Speaker 2 (02:51):
Yeah.
Speaker 5 (02:52):
I think for the last eighteen months to two years,
Wellington has borne the brunt of the commentary around the
struggles of hospitality very well traversed territory, around government cutbacks,
the reduced number of public servants and just the reduced
football in the city center here. But in recent times
Auckland has also started to find things they're going pretty tough.
Speaker 4 (03:14):
There's a huge.
Speaker 5 (03:15):
Amount of reliance on the CRL and nz ICC convention
center opening in Auckland, but ultimately they're still lacking an
incentive to get people into the city. You need an occasion,
You need events to stimulate that foot traffic because as
Carolyn's just touched on, accessibility and the cost to get
into venues is increasingly difficult for people.
Speaker 3 (03:35):
Tell us right now, how you're feeling hospitality is what
sort of state is hospitality? It's only feels like yesterday.
I was talking to carry Print of Gas on the
show Dame Carey Print of Gas, when she was in
charge of tourism. She was telling me tourism hospitality was
actually more of an income earner in New Zealand. Dan
(03:56):
Derey was.
Speaker 4 (03:58):
Well, that was the case.
Speaker 5 (03:59):
It's clearly not at the moment, and there is a
synergistic relationship between tourism and hospitality. We are seeing ongoing
struggles in the hospital sect because those visitor numbers just
haven't rebounded in the way that we need them to.
So the recovery of the tourism sector does give me hope,
because we're still only that sort of eighty six eighty
seven percent of the capacity of tourists we had prior
(04:20):
to COVID, So as that number starts to inch arpe,
I think that'll provide some relief hospitality operators. But at
the moment, we're heavily predisposed to the challenges that most
households are finding, and that household income and the pressure
that's on that at the moment is meaning that that spend,
that luxury spin that people have for going out is
(04:41):
just isn't there.
Speaker 3 (04:43):
Carolyn, You'll be feeling exactly the same for retail or
I'm not going to put words in your mouth. I mean,
how is retail right now, right in the middle of
the winter.
Speaker 6 (04:50):
Yeah, it's dark, you know, it's really difficult. All kind
of Wellington are particularly challenging. There are some small areas
in the provinces governed by that rural factor that are
doing a little bit better where the money from darereas
flowing back into their local environment. So that's holding some
businesses up in terms of those spaces. But largely we're
(05:13):
just hearing that sporadic trade where you know, one day
doesn't follow the other, and you know, it's just really
hard to get a sale and to be successful. We're
still seeing lots of businesses close and largely you know,
can't negotiate leases when they come up for annule, so
can't get it at a reasonable price that with rates increases,
(05:35):
you know, the cost of payments, the cost of insurance.
People are saying, we just can't see how we can
make ends meet and survive until things turn around. So,
you know, we had the thing in twenty twenty four
about you know, survive to twenty five, and now it's
all about surviving in twenty five. And I don't see
much light at the end of this year. It's going
(05:57):
to be next year before we start to see any
economic change. That's going to mean that households feel that
they can come into town and go out to lunch
and go into the stores and buy things.
Speaker 3 (06:07):
But we kept on telling get being told that second
half of this year. Are you saying it's not second
half of this year.
Speaker 6 (06:13):
Look, we've got one more rates cut likely probably in
this reserve bank cycle.
Speaker 3 (06:18):
In this month.
Speaker 6 (06:19):
They're going to do another probably twenty five basis point cut.
They have signaled they're not looking at doing any further
cuts for the rest of the year. So where we're
going to get the stimulus. Consumer confidence is critical to
both hospitality and retail. Consumers are feeling uncomfortable about job security.
If you don't have job security, you're not going to
go out and purchase things. Mortgage rates are still high.
(06:40):
The cut that the Reserve Bank is going to do
is already bought into the priced into the mortgage rates
at the moment, is what we're being told. So just
finding out where is that relief for consumers. If we
don't get consumer confidence, businesses won't be able to turn
around and they won't survive.
Speaker 3 (06:57):
Through Steve Armitage, we were told over the weekend. Well,
I read over the weekend that we've been told. You know,
if Dairi's doing well, New Zealand's doing well, back off,
stop moaning about the price of your butt because of
dairies doing well. Who cares? We're all doing well? Is
that right? As far as hospitality in New Zealand's concerned.
Speaker 5 (07:17):
Look, it's hard to compirm that in a general sense.
I think if you look at the performance of hospitality
operators in the South Island, you could certainly make that link.
Speaker 4 (07:25):
Clearly.
Speaker 5 (07:26):
You know, their economy is heavily predisposed to the agriculture sector.
We're seeing strong performance on the West Coast, We're seeing
strong performance in Canterbury and the lower South Island. So
you'd have to say, you know, you could draw a
link between the two. On that basis, it's really the
major centers, Wellington and Auckland where the going is the toughest.
And I'm sure we'll get to a discussion around this,
(07:48):
but that need to invest in events to try and
drive visitation is what's really missing at the moment.
Speaker 3 (07:54):
Can I just ask you on the christ Church you know,
because everyone in hospitality is saying they're doing really well.
That is that because they are a progressive and rebuilding
city as well as the farming. I mean they are.
They've got your universities doing well. Everything seems to be
on a high And I'll come to you Carolyn on
that too. Is that something that we could look at
and say, well, christ you just doing okay?
Speaker 2 (08:15):
Yeah?
Speaker 4 (08:15):
I think so.
Speaker 5 (08:16):
Clearly they've had their challenges to overcome over the of
course the last ten to fifteen years, but they're now
making every post winner.
Speaker 4 (08:22):
The fact that you've got a council.
Speaker 5 (08:24):
And the council entity itself seems to be really well
joined up and clear on what their vision is for
the city. Every time I've gone down there in recent times,
I've been surprised with the footfall and the positivity around
the city center. Itself, and then you throw on the
likes of Takaha Stadium coming online and hopefully a program
of events which we'll see that really showcase the city.
(08:46):
There's a lot of optimism in around Cantererbre at the.
Speaker 3 (08:48):
Moment, Carolyn, are you hearing the same thing in retail?
Speaker 2 (08:50):
Yeah?
Speaker 6 (08:51):
Absolutely. Look and to Steve's point, they've gone through, you know,
ten to fifteen years of really difficult times and the
city is now beautiful right and largely rebuilt, and so
their pipes are all done and all of their infrastructure
work has done, which we can't say the same and
other major cities around the country. And they are still
(09:11):
supported by that dairy which is flowing and through. And
they did have an influx of people post COVID. Lots
of people from Auckland moved down to christ Church and
found opportunities there that they felt were better for them
and their family after you know, going through COVID, people
had a look at themselves and of determine what they
wanted to do next. So certainly it's more positive and
(09:33):
buoyant in christ Church than it is in other parts
of the country. And you know, Auckland is a really
critical part to the country, So dairy, we can't say
that dairy is not important. But Auckland likewise is also
really important because of the sheer size of the city
and the volume of the GDP that the percentage, it's
something like sixty percent of the GDP comes out of Auckland.
So if Auckland's depressed, they've got a higher level of
(09:54):
unemployment than the rest of the country on average, then
you know we're going to struggle as a country too.
And you ask individual people how they're doing, they're not
going to say they're doing great.
Speaker 3 (10:06):
Right now, Business Panel today you have Steve Armitage and
Carolyn Gray Carolyn right young, sorry Carolyn changing your name. Now,
State of the Economy. I want to talk a little
bit more about what you said was sir, Carolyn survived
to twenty five. I honestly think we're going backwards. What
is your feeling, Well.
Speaker 6 (10:26):
I think it's the compounding factor, right, It's that we've
had a long period of time where where businesses are
really struggling in New Zealand, and so if people aren't
making a profit and they're making a loss, it is
compounding and so it does feel like you're going backwards.
Speaker 3 (10:42):
The comparative numbers.
Speaker 6 (10:43):
Retail cyclical, so we look at year on year numbers.
So if you look at July versus July twenty twenty four,
the numbers are there or thereabouts, but we're off a
really low base and it's been really challenging. So if
businesses weren't making money last year or the year before,
they're not making money this year. It does feel like
it's getting compoundingly worse. And sometimes there's additional factors that
(11:04):
come in that you had more of an impact on
business or just more on morale as well, around how
you can keep being buoyant in a tough environment.
Speaker 3 (11:14):
Well, you've got to love what you do, Steve, don't you.
Speaker 5 (11:16):
Yeah, Well, I think going backwards is how most households
feel that the narrative that's out there and the government
has been pushing it, is that with the interest rate cuts,
there's some additional spend coming into each household, a little
bit more discretionary expenditure, but of course the cost of
everything is going up at the same time at an
increased rate, So although you know you might be getting
a few more dollars in your pocket, that's going out again,
(11:37):
and increased insurance premiums and other things. So most households
I don't think buy into that narrative that the government
has been running around some additional headroom and your expenditure
because it's just simply not the truth.
Speaker 3 (11:49):
But I mean in your industry too, hospitality, if they
look back on last year, they're going to probably I mean,
that's no point looking at those figures, like Carolyn said,
because they were tough. I mean, if you put your
figures from July twenty five to pre COVID July, what
would many of them say?
Speaker 5 (12:06):
Oh, yeah, there's no comparisonolutely right. I mean I have
some hope, you know, And I think it's really important
that we don't just perpetuate this negativity, right because part
of why I think we have a struggle getting young
people to come into the sector is because if you
pick up the paper day to day, all your reading
is negative commentary around the current state of the sector.
(12:27):
So if I think forward, if I'm looking at summer,
you know, we know, as Carolyn's just alluded to, with
retail hospitality is very cyclical. Were expecting to spend over
that period from a domestic visitation point of view, and
with increasing connectivity to some of those major international ports,
through through more flights coming in a reasonable cruise season,
(12:47):
and other things that gives me some comfort that summer
should be reasonably stable for most hospitality businesses.
Speaker 3 (12:52):
Can I both ask you both very quickly? I mean,
looking forward? What is the industry? What are your people?
What are your foot soldiers that own small retailers or
you know, what are your foot soldiers telling you? Karen?
Speaker 6 (13:05):
Look, The challenge I think is Steve outlined is some
of the ongoing expenditure increases they've seen on things that
they can't control. When you look at insurances, leases, rates, wages, payments,
all of those things, that's been really challenging. Businesses are
still inspired by the work they do, and they've still
you know, they have bought stock for summer and paid
(13:27):
for it already. You know, spring stock is arriving in
store already. Summer stock won't be far behind. So they
have to make it work. Businesses are really inspired, and
how do they make it work? Because they know they've
paid for the stock and it's coming in, so they've
got to find a way to stay open, hopefully get
through summer, and then the economy might have turned a
little bit more by then we've got a launching pad
into next year. At some point we are going to
(13:49):
see that positively turn around. And how prepared we're going
to be for that, and what initiatives we're going to
have in place to ensure that we can continue to
thrive going forward will be really important.
Speaker 3 (14:00):
Steve, your industry are you seeing because we're not seeing
it in Wellington. We're seeing people buying old cafes and putting
a coat of paint and few tiles and changing the name.
But it's been a while since we've seen a million
dollar bill. I mean, and that you well know was
happening every week all over New Zealand.
Speaker 5 (14:18):
Yes it was, yeah, and there are there are still
instances of that happening in other parts of the country.
It's not the case here, yes, but there are certainly
some confidence in other areas and investment of reasonably significant
nature taking place. But you just come back to the
point around where things are sitting at the moment. I
think the recent announcement around the merchant fees and surcharge
(14:40):
right now that has a huge impact on the bottom
line of a lot of our members. Speaking to one
last week who saying you know, the cost and position
of having to absorb that into his business is around
ninety thousand dollars a year, nineteen or nine zero. Right, Wow,
the annualized profit for that business is one hundred and
thirty five if you're you know, that's a huge whack
(15:01):
out of the profitability of that business just through one decision,
which seemed to me to be very rushed.
Speaker 4 (15:06):
There was a very little.
Speaker 5 (15:06):
Consultation about it, venient line publicly to so this is
going to help your pocket, but the reality of that
is really tough for business.
Speaker 3 (15:15):
And can I just ask you what the reality of
that transpires to?
Speaker 4 (15:20):
What's going It's going to mean that prices go up?
Speaker 3 (15:23):
Yeah, they can't absorb that, No they can't. How can
any business absorb? And it's retail as well.
Speaker 6 (15:28):
Absolutely the same, you know for a small retailer. And
it is really a play for small businesses because the
bigger guys have been able to negotiate better rates. We
know that forty percent of transactions that go through through
the switch are if posts and so they are free
of charge. But then that means that sixty percent of
the transactions that go through are not free and so
you know, the current legislations enables retailer or a hospitality
(15:52):
business to recoup that through a surcharge, and just removing
that point blank and saying that businesses have to absorb that.
It's not thinking through some of the repercussions, and there's
some unintended consequences in that. We're going to see an
increase of contactless payment occur across the network, so more
funds and fees will go to banks and credit card companies,
(16:14):
and that will mean that less transactions go through the
FPOs switch, So a higher percentage of transactions will incur
a fee, so that that business that's incurring a ninety
ninety thousand dollars fee now will probably rise by between
forty and sixty percent, So they're going to go up
to one hundred and thirty thousand dollars or more. And
(16:35):
what's going to happen is that they're going to be
in a break even space. So the only way that
businesses can small business especially can survive through that is
to change price, because that's the only lever they've got.
So it becomes an inflationary measure. And you know, we're
going to be lobbying really hard through the consultation process
and select Committee to really make sure that government understands
(16:56):
the impact on small business and New Zealand is made
of smeeths. We've had a whole range of different people
outside of retail contact us, you know, from panel beaters
and Canucks and really small businesses that use payments as well,
but they're not viewed necessarily in hospital or retail, but
they are a merchant and so they understand the cost
(17:17):
that's happening and how it impacts their business.
Speaker 3 (17:20):
So right across in the Business panel for our every
second Monday, and we have Hospitality in New Zealand CEO
Steve Armitage and Retail New Zealand CEO Carolyn Young. Let's
talk about foot traffic. I'm going to come to you
Steve first one n CBD foot traffic is nowhere near
pre COVID levels. How much do you reckon that is
(17:40):
directly hurting hospitality in retail? Now, if I want to
go out and buy a shirt, I'm going to drive
into town and I know where I want to buy it,
so I'm going to do it. If I want to
go out for a meal or a drink, I know
where I want to go. Is am I making it
too simplistic?
Speaker 4 (17:55):
No, you're not.
Speaker 5 (17:56):
No, but foot traffic is absolutely hurting our sector. You
can see it day to day just walking here. You
know that there just aren't people around to sustain the
businesses that their doors open at the moment. So until
we find a way to incentivize people to come back
in on a regular basis, those businesses are going to
continue to find it tough. Now, Wellington, New Zealand and
(18:16):
other entities like it up and down the country, part
of their remit is to incentivize visitors to come into
the region. The city center is a key part of that.
I have some sympathy for the likes of Wellington en
Z because due to cost pressures, councils have had to
put investment into other areas. Literally in Wellington the pipes
underneath our feet. It's meant that there's less funding going
(18:39):
towards the likes of a Wellington n Z to try
incentivize visitors to come into market. So that lack of events,
those lack of activations that you might have been accustomed
to in past times are certainly hurting and week to
week are meaning that we're just not getting the number
of people into the city that we'd like to during
the day.
Speaker 3 (18:57):
Carolyn, is there any more than we can do to
get people in? Look, it is.
Speaker 6 (19:02):
Really difficult right unless people are coming in. We know
that people's shopping head of its and retail have changed,
so their first border call is generally looking online and
doing research online then coming into store. But if you
have more people working in the city, naturally they're going
to go down Lempton Key, They'll be down Wallow Street,
they'll be along the terrace, they'll get a coffee, they'll
buy lunch, they'll see something in store and they'll come
(19:24):
back and they'll buy it. So if you're not here
and you're not flowing through, then you're not going to
have those purchases. So I do think it's important that
people get you know, that we get people back working
in the city, and then it's about changing habits. People's
habits changed after COVID and they haven't come back out
as much as they have previously. So it is you
(19:44):
know what doll we do? You know, what are the
events that we can bring on. We know that Wellington Visa,
Wellington on a Plate is on at the moment. It's
a great event. It's you know, one of the largest
hospitality events and around the Oceania region. It's a really
great thing. But what's next, what's going to bring people
out next month and the month after and the month
after that. Because those things we know, WOWE is really
(20:05):
great for retail and it's probably good for hospital as well.
So really having that catalyst and that flow of events
across the city and needs to be replicated across the
country because events are really critical to bringing people in,
whether the international tourists or domestic terrorists.
Speaker 5 (20:22):
We've advocated alongside other associations for some time now for
a form of accommodation levy to be introduced so when
international domestic visitors are moving around, there's a small surcharge
on the bill which would raise a significant sum of
money that would be reinvested in the region that it's
generated in and it could go towards destination management, destination marketing.
So provides a war chest if you like to be
(20:45):
able to invest in major events which the city is lacking.
Speaker 3 (20:49):
Right tell me about you both would have discussions with
both the councils and government. I mean, Steve, have you
mentioned have you had the discussion with government about trying
to get the government workers back working in the offices.
Speaker 4 (21:02):
Yep.
Speaker 3 (21:02):
Yeah.
Speaker 5 (21:02):
And when the announcement was made or some eighteen months ago,
now twelve months ago, specific to Wellington that public servants
were going to be spending more time in the city center,
they were being instructed to come back into work. Know,
we welcomed that decision. We thought it was an important
statement by the government. It hasn't resulted in a significant
(21:23):
uplift and spent. I don't know that the behavior is
actually reflected in the day to day realities of those
of the ministries and departments around Wellington.
Speaker 3 (21:31):
Carolyn for retail, is has it helped or is it hindering?
Speaker 6 (21:34):
Well, we haven't seen it up tick yet. And I think,
you know, the government is one part of that. And
then you know, you think of all the commercial businesses,
the law firms, their accounting firms that you know, every
other business, architect firms, you know everyone. We need all
of them to be coming into the city and to
be getting back to those habits that we had pre COVID.
Speaker 3 (21:52):
So you know, is it a reality? Sorry to interrupt there,
but is it now just becoming I can hear our
listeners say is that just now a reality and that's
not going to be fixed.
Speaker 6 (22:02):
Not necessarily. If businesses see value in having their workers
in their in sit to being able to engage with
each other and work more efficiently and effectively, they'll encourage
them to come in. So I think it, you know,
I think it depends. It doesn't have to be that
everybody works from home. I think, you know, you can
be more efficient and effective if you're working in person.
Speaker 5 (22:24):
Yeah, I think culture suffers when you don't have your
people together on a regular basis. You can't build culture
through a screen, in my view, you have to have
people physically co located in getting to know one another
and understand that they know what purpose they're working towards.
So I think we've suffered as a result, and it's
one of the struggles that we have around our sector.
(22:45):
Holding on to talent is a real bugbear, and I
think you're finding young people in particular don't have that
sense of attachment because they're not used to in general sense,
they're not used to working as part of a team.
They're doing it remotely, and so as a result, they
don't see themselves investing in the long term, and a
lot of businesses that could be benefiting from retaining that talent.
Speaker 3 (23:05):
And could it change people's habits. I mean all three
of us grew up by going on a Friday night
to have a bear with your workmates and meet new
people and get out there and be part of life.
I mean we've all got probably lifetime friends that we
met at a pub that had nothing to do with
work or sport. Is that hurting us?
Speaker 4 (23:23):
The one in my mind view? Yeah, Like I say, I
think culture is critically important.
Speaker 3 (23:28):
Now.
Speaker 5 (23:28):
It doesn't mean you always have to be having a
drink in your hand to build culture, but the opportunity
to socialize and get to know one another, understand what
makes each other tick. How you can get the best
out of somebody just through a conversation I think is
lost when you're doing it arbitrarily through a screen and
you've got to fix time for a meeting.
Speaker 6 (23:44):
And look, things happen organically right in an organization. So
those organic conversations, and you know, it's the water cooler conversation,
right that you wouldn't have found out something like oh wow,
I didn't know that you did that. Oh we must
connect up because I'm doing a piece of work, and
I think it aligns with what you're doing. I better
make sure that I've covered off what you need to
have at your end as well as what's happening with
other people. So you know, being in the office provides
(24:08):
those opportunities and that just gives sustainability to cities and
we can all thrive rather than the struggles that everybody
seems to be having at the moment.
Speaker 3 (24:19):
Business Panel with Steve Armitage and Carolyn Gray. Can I
just ask you Steve, firstly, you probably saw the front
page article in the Post on the weekend about how
difficult Wellington City councils making it for liquor licensing in
this city. Can I give you an example. We have
a little room at a restaurant, a little little area
at the back of our restaurant's a bar, private bar,
(24:40):
and we wanted to change the side door of it
to allow people to go in the doors. They have
to come through three and a half thousand dollars to
do an amendment to a license to change an entrance
to a doorway.
Speaker 4 (24:52):
Yeah.
Speaker 5 (24:52):
Look, this issue routinely comes up, but there's no question
Wellington has been the loudest in terms of the cost
impact for business and a sense that there is a
slightly different view being taken by those involved parties here
the relative to other parts of the country. So we've
provided our Minister regular examples of businesses that operate in
(25:13):
Auckland and Wellington other parts of the country. They're putting
in the same information. They're getting their license in Auckland,
but there's hurdles that have been put in front of
them in Wellington. And then you've got the cost of
friendship too. You know, it's more expensive annually to get
a license here in Wellington that it is in Auckland.
Speaker 3 (25:29):
So I'm not sure that you know. But if you're
got to go for a four o'clock license in Willington now,
they just put the price up to ten thousand dollars.
Speaker 5 (25:35):
So we've asked the Minister to look into this. We're
hoping that we're going to be put in front of
the Ministry of Regulations for an opportunity for this to
be looked at in detail.
Speaker 4 (25:44):
That what we would like to see is just some consistency.
It shouldn't have regional variation.
Speaker 3 (25:49):
Are you hearing the same caarent Are you hearing that
your people in retail are having more difficulties with Wellington
City Council than anywhere else in the country.
Speaker 6 (25:56):
And not specifically. No, we know that the RMA is
a really big challenge and it's a really big barrier
to opening news stores and it just puts lots of hurdles,
cost time, and you know, people consider whether or not
it's valuable. So RMA is a big barrier to entering
(26:16):
the marketplace that we haven't heard that there's a differential
in terms of Wellington City Council.
Speaker 3 (26:20):
Okay, let's talk unemployment. The unimble employment rate came out
last week. It's now five point two percent, with many people,
especially young people, especially young people out of work. Steve,
are you seeing this in hospitality? What's the vibe like
about getting young people to work?
Speaker 5 (26:36):
Well, there are certainly jobs available in hospitality. If I
go up and down the country, I look, there are
vacancies there. What I think is part of the problem
is that there is an expectation amongst young people that
they should be working at a particular level and earning
a particular amount. There's not so much of a responsibility
on them to prove their stripes, to get to know
a business and work your way up so I think
(26:57):
I think there's this mismatch between people's expectations and the
reality of starting and forging a career. That's something that
we need to overcome. Is also a challenge for us
in hospital you know, we've talked earlier about the fact
that if you're opening up the paper and you're reading
negative headlines all the time, it's a hard ass to
try to sell that when businesses are doing it particularly
(27:19):
tough and you don't know if the business is going
to be there in the long run. But also parents,
you know, I think there's some responsibility there. Hospitality has looked.
Speaker 4 (27:26):
At as a as a.
Speaker 5 (27:28):
Brief stop on the way towards doing something different. Now,
I think hospitality can be a hugely rewarding business career
for people. It can take you all around the world.
Speaker 4 (27:37):
It could take you.
Speaker 5 (27:37):
Into business management, ownership and so on. And we don't
see it celebrated in the same way that you do
in the Northern Hemisphere, where people work in hospitality and
are still waiting startus well into their seventies. But we
just don't treat it the same way.
Speaker 3 (27:50):
Yeah, same with retail, isn't it, Karen.
Speaker 6 (27:52):
Yeah, Look, perception of working in retail is the same.
It's not great. And one of the things that we
know that working in retail can do. Look, everyone has
to start at the beginning, and the beginning is often
the shop floor, so most people don't start higher up,
especially when you're young. Right as you say, you've got
to earn your stripes. But the thing about working in retail,
and I'm sure it's similar in hospitality, is that if
(28:12):
you're enthusiastic goods, you're a quick learner. You know, you
turn up, you do all of those sorts of things.
Acceleration through to leadership happens really quickly in retail and
there's really a lot of opportunities. And then secondly, in retail,
you know some of the bigger operators, you can do
almost anything. You know, you could be a buyer, you
(28:32):
could be buying things internationally. You could be doing marketing,
you could be doing health and safety, you could be
doing technology. There's a whole range of things, and it's
not a linear start at this point and finish at
that point. You can go, you know, you can transverse
a whole range of different things in retail. And we've
got a really interesting program that we're doing seven jobs
and seven days in TikTok so for young ones, have
(28:53):
a look at it. It's a really great way in
which you can see what retail could look like if
you're young.
Speaker 3 (28:59):
And you know, the other thing for both your industries
or our industries is social media. I mean, you know,
so the growth of social media. I know hospitality has
been quite slow to pick up on it, but it's
massive now. Same with retail. I mean for young people,
they're so damn good at it.
Speaker 6 (29:16):
Night yeah, I mean there's lots of skills that young
people are really amazing at, but just widening their thought
around what a job and a career in retail could
look like as the key thing. And making sure that
people don't think that your job has to start and
stop on the shop floor. There's so many more things
that you can do.
Speaker 3 (29:33):
Okay. As we wrap the business panel up, we ask
our guests what they would do to I don't know
if Steve, if you had to meet someone and go
out for lunch or dinner or do something in Wellington,
I mean you are an ex Wellingtonian, but your CEO
of hospitality in New Zealand, you want to really impress someone.
What are you going to do.
Speaker 5 (29:52):
I'm going to avoid that because I can't afford to
pick a memo over another. I am an outdoors kind
of guy. I really enjoy Wellington on a good day,
don't we all. But I quite like going around the
fort battlements, up around merym upinentually there watching bay. I'd
love to take my daughter there. We haven't had a
chance to do that yet. It's certainly a high my
(30:13):
agenda to take around there.
Speaker 3 (30:15):
Do you still enjoy Wellington? When you come to Wellington?
You come here very very often. It's not like you're
a stranger. Do you still enjoy it?
Speaker 5 (30:23):
Wellington is different to the rest of the country. I
particularly enjoy Wellington during the summer months. I love walking
around the waterfront. I like feeling connected to decision making
down here. I would like to see more of that
decision making rather than obfuscation. But no, I do enjoy Wellington.
I enjoyed living here for a period of time, but
Auckland was always calling me back home for family reasons.
Speaker 3 (30:44):
Okay, Carolyn Young, you looked as much as shock as
I did over that. It wasn't a great shining example
of great Walingtonia. But you are a Waliingtonia. What are
you going to do with that special person you pick
up at at the airport tomorrow.
Speaker 6 (30:58):
So what we do is we'd swing by Cafa Ice
pick up a coffee. They are really great. They give
you a discount if you've got a takeaway cup, so
you at your own cup. So we'd go in there,
get a coffee. We'd go up, we'd high cup Mount
Kalkau to you know, actually see the whole traverse everything.
We love that walk down. Then when we come down,
we would stopping at Dunche's Delly for lunch, so Craig
(31:21):
would look after us, have great food there, and then
we'd go into the Candala CBD. You go and see
Sheila at Hamilton, Money at Murray. You'd go into TP
and you go into Gubs Shoes and then probably pick
up some flowers from the local candalad area on the
way out.
Speaker 3 (31:34):
You're a Candala girl. Craig Dunshare, that's a name that
from the past. That's the old neo cafe guy. Isn't
it used to play lock for Wellington Rugby? You look
more information? I should be a talkback coach.
Speaker 6 (31:45):
Didn't Hospitality ask him for the recipe for that Karen
was Slice.
Speaker 3 (31:50):
Okay, I've never been up there, but I will definitely
now that I know that he runs. I never even
heard of it before. Hospitality in New Zealand CEO, Steve
Hamat to take you and thank you for everything you've
done for Hospitality New Zealand and your role there. I
know you're moving on.
Speaker 4 (32:02):
Thank you.
Speaker 3 (32:03):
You spoke too soon about my voice, Carolyn, so I
appreciate and good luck on your new job at Sale
in New Zealand. Thank you, Carol Luk. Always good to
catch up Boston. Do that well this year Today Carol
Young's and x CEO of The Pulse.
Speaker 6 (32:16):
They made the playoffs. Still a good start.
Speaker 3 (32:18):
Right, didn't quite go the Pulse didn't quite want to
go the same. Thank you both so much.
Speaker 1 (32:23):
For more from News Talks ed B listen live on
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