It's been one of the toughest years in memory for many businesses around Wellington with a sluggish economy, public-sector job cuts, high inflation, and roading changes around the CBD.
But there is still loads of positivity around the capital according to our two guests on the final Business Panel of 2024, who are both hoping for a much stronger 2025.
Retail NZ chief executive Carolyn Young and Backhouse Interiors owner Michelle Backhouse joined Nick to reflect on the year and their hopes for the new one.
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No, I'm not going to dance with Carolyn Young Whliff and Hell Retail New Zealand chief executive Carolyn Young loves a Simon. She's that I'm trying to dance. You're what they say about white woman, I can't dance? Well went on that neck. Well, I just said it. I didn't expect you to make a comment. I just said, white woman can't dance. Oh, I started all right. We started the business balts the last one of the year. I could have some fun Cutter Absolutely. Thank you Carolyn Young for joining us and back our Centteria owner Michelle beck Out. Michelle, welcome to the show. It's the first time you've done it, but your family business has been iconic in our city for as long as I possibly can remember.
Thank you, Nick. It's great to be here. And yes, we've been in Wellington since nineteen forty eight, starting off as a manufacturing business just off Courtney Place, and our latest iteration is coming back. What we're sort of returning home into the Courtney Place precinct, into Allen Street. So we're very excited about the positive change that can bring about, hopefully lighting a bit of a bombfar and getting other like minded businesses to move back into the city.
And I can tell you that your new shop is beautiful. It's been well done. It feels good. You had a look girl. Not yet come on your retail in New Zealand. Big shop opens like that downtown. You should be walking in and saying this is fantastic. No, congratulations, it looks great. We are later in the show going to talk about you shifting there and the reasons why you shift this. But I want to start the show by looking back on twenty twenty four. It's our final show of the year for business panel, not for the show. We've got another week to go with the show, but our business is our last business panel and it's been a big and I would say eventful year for business people. Karen, I'll start with you twenty twenty four, give us your thoughts, your members thoughts. How will you remember twenty twenty four.
Look, it's been tough, you mean, we can't we just can't get past that. I mean, we've had lots of engagement with members around how difficult it's been for them for all sorts of different reasons in the highs of the election last year and people's optimism around things turning around really quickly, when in reality, the economy takes some time, and we're probably still three or six months away from really feeling the impositive impact of the levers that the Reserve Bank's been pulling. So getting through the next three or six months is going to be really important. And the fact that you know, with our saying now that thereovery won't be as strong as what they anticipated, So everyone's been doing it tough, and you know, consumers and retailers.
Michelle Beckhouse, you're one of the most positive people that I've ever met. Now I've only just met you, so it's not like we're long good old buddies or anything. But I met you about a month ago for the first time, obviously knew who you were. You're very positive people. How was person How was twenty twenty four for you?
I agree with Carolyn, it's probably been the most challenging year we've ever experienced in business, and we have a business not just in Wellington but in Auckland, and we also have distribution around the country. I think the hardest thing is that it doesn't matter how much money you earn. Everyone's felt really challenged this year in terms of their disposable income and I think it's very difficult for us in our type of business. How do you plan, you know, what sort of stopped do you bring in? You know, also taking on extra staff, you know, and so I would say this year our team has worked harder and longer hours than ever before. We decided not to take on additional pairs of hands because we didn't know how the year was going to you know, travel We normally employ industrial design students and this is the first year we decided not to because we thought we can do it ourselves. And that's you know, trying to put more money into the important things in the business.
You have to make decisions that are right for the business because you're thinking about the sustainability of the business and you've had to absorb lots of increases from leases to insurances to you know, wage increases. You know, there's lots of other impacts that have been really big on businesses that have made it really difficult to withstand and think about planning because you don't know how many customers are coming in the door and really what stock you're going to have. So the worst thing for a retailer is not having enough stock, and the worst thing for a retailer is having too much stock.
Resolutely very fortunate we had a relocation sell in Wellington and we are that brand. It does carry a lot of stock and that was our as card I guess we had. We didn't have an eye in stock. We could sell existing stock lines all good stock and also get a bit of you know, traction in the sort of brick and mortar side of what we do because people had to come in to have a look and see what those pieces were. But I think for us to in our business, it's been the high cost of freight and the fact that it hasn't been as much freight coming down into Wellington, and of course problems with ferries and getting freight in South Island. That's been a bit of a logistical nightmare as well. And a lot of these freight companies, like international freight companies, they wait until they fill up their vessels. It's to make it takes longer, so it takes longer. So we've just had a shipment, for example, it was supposed to be here from Italy last week and it basically the container got dropped off forty foot container in Singapore because I suspect they just didn't have enough freight coming down and they're waiting for a vessel to be fully subscribed. Those extra costs, extra costs.
Yeah, they make a really big difference. So you've got extra time frame. You're trying to juggle worth in order to get to get stock on the shelves when you promise it, and the cost and time of getting it here is just continuing to increase, both internationally and domestically. I do think we might be hearing an announcement after cabinet today around the fairies, so.
We're going to be ready. Have you heard something on that.
I heard a whisper that there might be an announcement today, so we know that they were going to announce something before the eleventh, So that's only two days away, so it's not today, it's in the next couple of days.
Michelle, I want to ask you because I know you know once again the positivity, but I mean, how has government and council decisions? How have they affected you as a business. You've got a new government, they'll make changes. We've got a council that's not wouldn't I wouldn't classify them as the most popular council. The decisions that are making. How has that affected you as a business woman in the city.
I think the biggest problem I've had in Wellington is lack of confidence, and that unfortunately filters down to consumers. Don't feel confident in terms of you know, the rates have you know that's a huge eighteen percent. In Auckland, we're only paying seven percent. So there's lots of discussions around that. You can see businesses saying, well, do we expand in Wellington or do we expand in Auckland because it's a little bit more business friendly up there, even though they've still got the same issues around retail challenges.
I think volume people people.
We're two hundred and sixty thousand and Wellington Greater Wellington for sixty so it's economy of scale once again.
But I think there haven's really given me the out one.
I'm going to say, if we'd had more unified leadership in the city, that would have been helpful. If we'd had less emphasis on transportation in the city in terms of cycle lanes, that would have been helpful. If we'd had more support and around businesses and what they can do to help businesses thrive, that would have been helpful. And the consultation we've experienced with council has not always been helped for In fact, it's been negligible and really challenging.
And I think to your point, there has to be a way that we can find for commuters whether you're on a bike or you're walking, or you're running, or you're in a car or on a bus or on a train, and businesses to be able to coexist because we can't work in isolation. You know, if there aren't businesses and hospitality and retail out there, people aren't going to come into the city, and if there aren't accessible ways to get there, they're not going to come either. So you can't disrupt everything so much so that businesses close down or they move premises because of the decisions that are being made. We've got to find a way to coexist into more collaborative around how we want to work together. And it feels very isolating at the moment and the consultation that has taken place by the council. When you ask any business about the consultation, they say that they don't feel they've been consulted and counselor adamant that they have. So you know, there's a disconnect there.
What about closures to both of you, I mean, Michelle, there's been a lot of business closes, as we heard this morning that Myrtle, you know, very successful bakery. Now, I think that's just down to the fact that they must have had a good lease or a lease that was you know, the building's up for sale and they want to put apartment, so I think that's purely down to a lease there. But that's me speculating. I don't know, But there's been too many closures.
Well, I hope they come back again because they're a great business. They have the larder and mirrama, so maybe it's just for them pausing knowing that they can't stay in the existing space. But the closures, I mean, it's symbiotic. We need retail and hospitality, everything working together. You know, if we don't have thriving retail and hospitality, we can't give jobs to young creatives coming into the city. You know, we've built our reputation in Wellington, I being in arts and creative center, so we need those businesses to thrive. And you know, the city's so much more than just transportation route and service industries. You know, when you travel to a city, you want to go to a really good cafe or a good restaurant and a good retail shop.
It's almost the first thing you want to do. That's the first thing, the first thing you come into a new town. You say, totally. I went to Melbourne, you know, a couple of years ago. So where do I get your coffee? Undred percent? Where's the best breakfast in town? Isn't it?
Absolutely? When we were in Auckland last week before we went, we booked two restaurants, you know, same when we went to Sydney. Always we're hotel close, we can walk to everything. What's a great restaurant, great place to meet friends, to have lunch? And then it's what about the shopping?
So I've got to go to an air break But I will ask you again, I mean the same question. A lot of closures in twenty twenty four in retail as well.
Yeah, a lot of closures and it's been really challenging. So I think that's, you know, to the to really emphasize. I think the fact that we really want to find a way to work together, and we do know that businesses need to be agile. Businesses can't stay the same because everything changes around you, so you do also have to be agile and be able to pivot and change and be dynamic to the environment that's in front of you. But there is something when we're seeing such a high number of businesses in the Wellington region closing, and when we look at some of the reasons that they're telling us why they are closing and what their neighboring businesses will say about the impact of their business closing. If we think about Thornton Key and the challenges around the development of the bus and the cycle lanes down there, it's been really difficult for retailers down there, and I was drove past there yesterday just before four o'clock it was completely dead.
Right. I'm going to talk to Michelle because Michelle is very experienced in Thornton, knows more about Thornton than anyone else at Wellington. So we will ask those questions when we come to the Thornton. Let's talk about a horrible phase that I hated, and I don't think it's going to make any difference or any change. The phase survived till You're till twenty five has been uttered by many of our guests, shy, and people keep talking about it in retail. Carolyn, what the hell does it mean survive to twenty five and what are the hopes for your members for next year?
Look, I think it's a little bit confusing because everybody kind of thinks, okatie's get to one January and we're all good. But ultimately what we know is that those economic factors is a lag and so it's going to take. Yes, you need to survive to twenty five, but it's probably sometime around May or June and twenty five that things will start turning the corner and they won't be quite as aggressive as what was first indicated by the Reserve Bank governor six months ago. So, you know, we do know the recession has been tough, and we know the tails has had a big sting to it, and it's going to be really critical how businesses can use this quarter because this last quarter of the year is so critical for retail. If we can make some good sales in this quarter, they'll be able to get through that first four or five months of the year, and by that stage, consumer confidence will have turned around, the economy will be you know, back on track, and we'll fully be able to see the benefits of that, and businesses should be able to flourish.
Michelle, That is, isn't it really? We all this hospitality is exactly the same. We hope for a big December because January we know it's going to be quiet, and then we're hoping what are your thoughts on that?
Well, I think you know, for us in our industry, December isn't such a big retail month because well, often we're working on projects that are months out. Obviously in terms of the Christmas gift byeing and things, it is important we have brought more stock in for that market. And you're right because for us, we close, you know, twenty second of December this year, and don't we actually closed up for two or three weeks to give us staff a good long break. So you know, January for us is a really tough month because you're not earning anything over January.
And it's so quiet and it's so smart time, right, everybody goes it and goes, yeah, we're going away, so yeah, so good for some.
Yeah, so December is and it's also I think a time for connecting with clients, getting people into the showroom to have chats and things. So it is important and hospitality very important.
So tell me, Michelle, how quickly do you think that the economic conditions will improve next year. You've heard Carolyn so she doesn't think it's going to be till May.
I agree with Carolyn. I think you know it's the lag even though we've had ocr cuts. I think it doesn't won't impact on people's disposable income, their mortgage when when they're renewing mortgages, et cetera. And so I do think it's The first quarter is very much going to be about sitting. Like we've spent a lot of time talking about technology and our business, changing up our website, being a bit more transparent, enterprising, what stock lines we can bring in that give people sort of instant gratification if they're going to make a decision. We're looking at just trying to stay a little bit more relevant in terms of pivoting because it's important. But I don't think we're going to see I mean, I'm seeing a few green shoots, a little bit more confidence, but maybe that's because we've relocated into the city a new shop, we have a new business, and people are coming in too, sort of have a little chat bit of a codado, who are you, what are you doing here? And picking up new business from that point of view, but I think, you know, we just really need to support retail and hospitality and so that they can thrive in twenty five. Yeah, because everyone's had the same message, and.
I ask you both the same question, starting with you, Carolyn, what do you want to see from your council next year.
I'd like to see a more collaborative approach around how we solve the issues in front of us. And I feel that we all need to be able to sit and thrash things out and understand that we may not all agree, but we need to find a way in which we get the best outcomes for the city. And that includes everybody, because if you spend you know, millions and millions of dollars on the Golden Mile and there's no businesses left to what end. And we know that Thornton has been a really challenging development and that that's been difficult for businesses down in that area, and we've seen some businesses close and councils said to me that they have learned from that experience and are learning from what's been happening in Auckland. But actually you have to take each area as it is. We know that that businesses are on their knees right now and actually going out and doing development and changing right now is tough. We do need some beautification of the Courtley Place area, don't doubt that and disagree with that at all, but it's around to what extent do we need to do that or a city the size of two hundred and fifty thousand people.
Okay, Michelle, your same question.
Yeah, I think that basically the council needs to think and talk to Wellingtonian's about rather than coming up with ideas based on ideology. I think Wellington traditionally Thornton Key was a destination. You had to have a car to go down there. It's not somewhere you walked in necessarily, and if our public transport was better, we could have made it all work. And we're not Copenhagen. I've been to Copenhagen, and it always makes me smile when these consultants came out from Denmark. But most of us live on hills and we have this very unique flat area. But you know, all of a sudden rip up car parking in areas that your business needs those people to come and visit you and trucks to come and deliver gods. I think the council, I agree, needs to be more unified. I would like to think that when they sit down for their sessions, they say what do we agree about, what can we agree on, and then go from that point of view, rather than all of these desperate ideas that are presented that are presented almost yes, and you know, I just sort of think sometimes there's just no common sense in some of the situations. And I would probably like to see more business focus on the council, someone who has actually run a business, someone who actually understands about employing staff.
You know, Michelle, I want to start with you on this one. I'm noticing a lot of positivity in the last few months of the year, with new businesses popping up around the city and others relocating to other parts of the town. You've just shifted from kai Firefighter, thorned and caught. I call it Thornton, you call it kaive a fighter. To be exact to the CBD, how tough or how big a decision was this for you to shift?
Quite a significant decision. We've been there for twenty three years. We've been there for twenty three years. We originally started our business obviously in Tiarro, and we had also time in Thorndon. We went to Cafar for it because we thought it would be easy for people to park outside. We are a destination brand and would be easy for our trucks to pull in and deliver goods. Within two years of being there, we lost our parking from seven to nine in the morning, which was fine. We worked with that and it was great, a cycle lane and a bus lane. And then two years ago we were notified that we were going to lose all our parking on the other side of the road, and we knew that was going to impact on us negatively because we don't have a public car park in kfor or Fora. The only way to get there if you don't drive is by bus. We don't even have a train station anymore. They'd closed that and then built two hundred houses behind us on the hill. Not great planning, but you know, so we decided, right, we need community. A lot of businesses started to close down there given the changes with car parking business. It wasn't about customers where with their staff going to park because it was nowhere for their staff, and some of these businesses didn't operate during the bus timetable hours. So we decided we needed more community, and we went wanted more connection because all my research I'm doing is that brick and mortar retail is still relevant and still important. And you know, a shop like ours and hospitality a restaurant, you people go there to have a chat, you know, to feel part of a community. And so we thought and would we live in town. We live in the city. So for us, as we run our business, how do we enjoy our business. We can walk to work, we can get to know our neighbors, we can get the energy from our neighbors. You know, it's symbiotic. I think for us, it was a big decision. Once we made the decision, there was no looking back. And yes it's a risk, it's a big space we've at least, but we feel very positive that this area of Wellington is a unique heritage. Part of Wellington's we're commerce. They're started and Blair and Allen Street in the early part of the twentieth centuries.
Taken over by those horrible nightclubs and bars, terrible places reverting back, aren't.
They misspent youth? But look, I think we need vibrant hospitality. We need vibrant and wonderful retail experiences because that's how we bring people into our city.
And retail is all about customer service. It's about engaging and connecting with people as they come in store. And we know that eighty five percent of sales and retail happened through bricks and mortar. They don't happen online.
There's a big eight. I would have thought that was miles.
Yeah, there's a big misnomer that that a lot of people buy online, but actually they still come into store. Most people actually look online first and they do their research online first and then they come into store. And when you sell, when you're in a sector like all of the stores down Thornton and Co Fight, where you are destined stores where you generally people would go, they would drive to those stores. They would work around They might need a vehicle to transport any item they've bought, or they might order something for delivery. You need to have you need to know that you can go and park and be able to have good access. And it's such an open area down through there. If it's terrible weather and you can't park, people won't go because you know you are going to get the full throttle of the wind and rain and Wellington and so you've really got to think about that, about the whole space and how do we accommodate those that do want to use a vehicle and those that do want to use a bus or a bike, and how do we get that integration of everybody working together, not one at isolation to the other.
Can I just interrupt their Karon just to ask you have you seen any positive change lately? And the retail set the saying they're now looking to Lisa looking to open up again.
We are hearing some positive sales stories from a number of variety of stores, and that's really around people identifying niches in the market, being more agile, pivoting to make sure that they are addressing those areas where there's an opportunity, and so being really and then also providing really good customer service. Customer service drives seventy percent of sales in retail. So if you've got really good customer engagement and customer service and you're welcoming people in your store, you're going to sell more. We all know what it's like, don't we. Michelle and we go into a shop and we get really well looked to have to we sometimes spend more than we just feel comfortable.
Involve me in this too, you know it involve me. I mean we feel comfortable. We just feel like, oh, that was a good service. I will buy something. Yeah.
I had a great experience at Unity yesterday, which is one of my favorite Wellington businesses, and another great experience at more Wilsons. And those are the businesses that I always go back to because I get amazing customer serves and we pride ourselves on giving amazing customer seves. I mean, we had a fabulous Saturday in our showroom and a lot of it is around that's taking time to listen to people what do they need. We also offer something that you can't do online. We lend people product to take home and try. If you're looking at buying something that's an expensive product, for their home. But I think you know everything I'm reading at the moment. Even big behome online businesses like Amazon are now investing in brick and mortar because they understand is how you get a much better customer experience.
Absolutely, I think it's really critical and you just that human touch that you get from that experience. And we if nothing else that we've got out of COVID, surely we've got that. We want to engage with each other.
Now.
I want to move quite quickly on a couple of things because I'm running out of time and I'm enjoying the company. I'm hearing a number of businesses and negotiating really really hard on lease deals, even asking for things like six or eight months free rent on a five year lease. Now, I haven't heard of deals like this for a long time. Michelle, you have done a lot of negotiating for leases over years, and what have you heard around town? There's some really good deals out there.
I think there are deals to be had. I think the biggest issue in Wellington the op X. You know, it's not just about the rent, you know, the biggest issue is you know, and in the bigger the space, the more problematic that is. But I think landlords who are probably understanding that they need someone in their building are going to be able to have a little chat to you. And I think it's far better to get someone in your space than have it empty. And I think a lot of landlords understand now. I mean, I know that this is what happened done Britain, mart and Auckland. They made these leases happen. They've got people in six months free rent just to get them in to so show them how good the space can be. So I would like to see some of our landlords here in Wellington, you know, basically offer some free.
They need to be more flexible.
They need to be far more flexible because you know, I think it's really important we need that activity in our city.
You here in Karen well you've got a number of businesses that you don't want to have empty stores next to you or two or three down the road. So if you can have all of the stores full, it generates and it generates foot traffic and people coming in. The businesses are going to thrive, they'll be more settled, they'll be able, you'll have sustainability through it. Nobody wants to see empty shop runts.
But certainly are you hearing deals are getting done? No, pretty good deals.
It's a great opportunity to do good deals right now. And I think when landlords aren't being flexible in that space, there's enough empty space that that businesses can go somewhere else and ask the same questions.
Yeah, well, I want to talk next about events. I think big events are really crucial to our city being buoyant again. I mean, I'm thinking of when we had the sevens, when we had the car races. Some of us would remember the car races in the city. We seem you know, big concerts at sky Stadium, you know, big stuff happening in the city. It just makes your city feel better. We're heading into summer where we typically see a lot of events. The second Black Caps versus England test and Debase and Reserve over the weekend saw two or three days completely sold out. Great. How are important are events krolent to our city?
Critical? Absolutely? We know an event like Wow, for example, brings a lot of people into the city and they come in and not only do they spend in retail, but they shop through hospitality. They go and see a wide range of sites around Wellington, that they go to Tipapa, they will go to the tanical gardens, they might go to the Bigonia House, to all sorts of different areas that create engagement and interest in the city. And then they go back and they tell their friends and farna about what they've seen and they get them to come into the city. And so events are critical for getting people in and getting the bend up to support businesses.
Did either of you see any of the coverage of the Test match between the Black Caps and England where they had the zoom the photos of all over Wellington. Oh my god, I actually physically had a tear at one stage. I went, we forget, we forget. We live in the most beautiful city in the world.
And the Saturday images were amazing because the sky was blue, although there was a bit of wind. Yesterday was pretty gray. But it's still such a beautiful, pictorisque city to come to that when you see those sites, it does look like a Pacific island almost, and you might be thinking that it's thirty degrees outside, but it is just so beautiful and picturesque and so easy to access. Oh you wonder why people wouldn't want to come here.
It's such a compact, beautiful city and a natural harbor. I mean, you know, walking around orange or bad. I went to Harbourside Market yesterday, even in the wind, it was still a joyous occasion.
I remember a net king doing this exact show with me as a guest, and she said, you know, Nick, I wish people would stop moaning about Wellington if we had decent weather, when none of us would be able to afford to live here. That's right.
This is the most livable city I've ever lived in. You know, I'm lucky I live in the city. I walk everywhere. We hardly use the car, you know, and I love the fact that, you know, going back, I'm not against cycle lanes. I think it's great that people can ride through the city. It's just that I think we need to have a little bit more balanced conversation around you know, businesses, cycle lanes, walking, et cetera. But this city, I can walk all my favorite restaurants, you know, food, you know, supermarkets, museums, galleries. It's fantastic.
Now, sorry, once again, Michelle was very rude to me to cut in. But I want to ask you one quick question, yes or no from both of you, because I want to find out where you take someone special? Yes or no? Does it concern you that there's no big events at sky Stadium over the next field.
And no, absolutely it does concern me absolutely.
Right the time that I most enjoy with our business hours to ask our guests someone extremely's someone that means really a lot to you, like a mother or father, or an auntie or a uncle that's never been to Wellington before. You're picking them up at eleven o'clock tomorrow, Carolyn Young, what are you going to do with them?
Well, if we say someone really special, like my mother who sadly passed about twenty years ago, but she loved roses. So I would take mom to the rose garden in the Botanical Gardens and we'd go through the beginning house for a couple of reasons. One is because it's really beautiful it's protected from the wind. But two it's because it might not be there much longer, so you really need to get out there and see what's there, have lunch in the cafe there, head lunch over the weekend. It was really lovely, and then it would go up to the top of the potential gardens to the skyline there and see that amazing view. Take some good photos to have lasting memories.
Right Michelle, We've got a lovely text here saying that she's the youngest youngish listener, saying to a big shout out to you because you help young creative people. Also had a couple of texts asking if you'd stand thought about standing for me. I've already had that conversation with you, which you've laughed at me. But anyway, what are you going to do with that very special person before you become mayor of Wellington? You've picked them up at the airport, and what are you going to do with them?
I would pick them up at the airport and drive them around Orangele Bay because it's the most beautiful harbor and we might stop for a moment. We might even go for a walk, probably run into about ten people we know, because that's Wellington. I would probably take them maybe to Prefab for lunch, because it's got great vibes and great energy and Bridget's always amazing. She always makes you welcome. I would probably Botanical Gardens. Oh my gosh. We spent so many fabulous visits there, went to weddings there, our children played sport on Anderson Park, we might even take a drive up to the top of Mount Victoria just to have a look at our amazing city and dinner. Well, I love Rita, it's one of my favorite restaurants. Well, we might be heading off to who knows in the near future.
Hopefully in the near future. Retail New Zealand Chief Executive Karen and I'm merry Christmas and thank you for all you do for Wellington and retail people and our show. I hope you have a really good break. I know you're going away. You're skouting about that before. Michelle Beckhouse, thank you and thank you for bringing your amazing business to Courtney Place. I think it looks beautiful, it's fantastic. Hopefully you've got a good deal from one of the hardest landlords in the country. So hopefully you've got a good deal and got a bit of free rent out of it. But we welcome you to that area and hope that that after your little breakover New Year, you think twice about running for mea and put your name in the hat and say ah, I can let my family run the retail part. I'll go for Meya or Wellington would be great, both of you. Thank you have a Great Christmas.
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