Christchurch earthquake: How large is the loss for retailers?

A recession, a gst-rise and now an earthquake? Just how much can Christchurch’s retailers take?

Sally Carey of Datamine, a leading New Zealand business analysis company, has pieced together some facts that deliver a potentially devastating story for ‘the garden city’s’ entertainment retailers.

“Recreation and entertainment spend for the Canterbury region is concentrated in the Christchurch city area (81%) so with closures in the city and people scared to head out on the town, this is the sector most hard hit by the business-side of the quakes,” explains Carey.

It doesn’t help that the quake struck in the early hours of the morning the day before Father’s Day, a day welcomed by retailers across all categories for its boost to business.

“To give you an idea, last year Father’s Day weekend retail trading (across all categories) was over $19.5M in the Canterbury region,” says Carey. “This year it will be relatively non-existent.”

An average weekday spend (based on August 2010 figures) is in the realm of $10.5M for the Canterbury region, so that signals a potential loss for every day that retail businesses are not operational. “Obviously not every retailer in Canterbury is affected, but even with the likely proportions, the numbers are staggering,” says Carey.

For supermarkets and service stations, the impact is likely to be less than for other retailers because they are geographically more evenly spread around the region. Stand-alone recreation and entertainment retailers are likely to be the most affected.

“In August, retail spend figures for the Canterbury region looked positive, up in every category on August 2009. September is likely to paint a very different picture for Canterbury and comparisons will be able to be made from our data in the first week of October,” says Carey.