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Regional rollercoaster: Paihia

As part of a new series focusing on retail in seven regional Kiwi centres, we examine what the industry looks like in 2019 for Paihia.

In summer, the small resort-style town of Paihia in the Bay of Islands hums with tourists and its population (under 2,000 permanent residents) swells considerably.

But when the holidaymakers go, it can be a stark reminder that ‘Paihia, gateway to the Bay of Islands’ is also in the heart of poverty-stricken Northland, where unemployment is higher than average. 

Yet things may be improving: in 2018 Northland topped the ASB Bank’s regional economic rankings, thanks to a 4.6 percent growth in jobs. This spilled into the retail sector, with annual growth sales at more than 5 percent. 

The Cabbage Tree has been selling New Zealand-made gifts and souvenirs in Paihia since 1992. It now has two shops in town as well as a third footprint in nearby Russell.  

Owner Robyn Stent says her customers are nearly all tourists, and two-thirds are international.

The Cabbage Tree’s Williams Rd shop boasts a unique ‘100 percent New Zealand zone’. It sells everything from magnets to contemporary art, but all imported items are excluded. Many tourists are price-driven, but plenty want authentic, locally made items as mementos or gifts.

The Cabbage Tree had its “best year ever” in 2016/17 but 2017/18 saw a downturn. A poor summer had a major effect on sales while a serious slip meant the main access road from Kawakawa into Paihia closed for four months.

Speaking before Christmas, Stent says 2018/19 has so far been even slower: down by 10 percent. Yet she is confident for the last quarter. “[There’s] a good summer weather outlook, great stock available and cruise ship numbers high.”

Stent is also acting chairperson of Business Paihia. The town has a busy tourist season, but for permanent retailers it’s “boom or bust, with the need to treble the sales in the high season so you can last for the next seven months”. 

“Opportunistic” summer pop-up stores can be a threat to business, and cruise passengers don’t always spend in every port.

Paihia retailers are “very fortunate,” she says. “We live in paradise and our visitors are generally happy and relaxed. But we can’t forget, we need to sell to them as well.”

Check out other articles in the series:

Why some Kiwi towns are rising while others struggle

Tokoroa

New Plymouth

Bulls

Kaikoura

Greymouth

Arrowtown

Selling to the Kardashians from Matiere

This story originally appeared in NZ Retail issue 760 February/March 2019

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