Business liquidations have hit a 10-year high with 2500 companies folding last year, marking the highest annual figure since 2014 amid challenging conditions for construction and retail.
The figure represents an increase of nearly 700 liquidations compared to 2023, while receiverships also climbed to their highest level since 2012, with 186 companies entering receivership – up by 84 from the previous year.
Liquidation and receivership numbers have been trending upward since the pandemic.
Retail NZ chief executive Carolyn Young highlighted the severity of the situation facing retailers, saying it had anecdotally been the toughest period in decades for some.
“We’ve spoken to a number of retailers over the Christmas break and a number of them have said it’s been the toughest year ever that they’ve had and they’ve been working retail 20, 25, or 30 years,” she said.
“Businesses don’t want to close and they don’t want to go into liquidation, so they are doing everything they can to stay relevant, and to stay available, and to be open.
“We do know that the good times will come back.
“And they will return – it is a cycle – but it’s how you get there.”
Notable recent casualties include Baby City, which has seen several stores remain open into the new year after new management purchased the company’s stock.
Meanwhile, hospitality businesses have been particularly affected, with the sector featuring prominently in last year’s liquidation data.
Hospitality NZ chief executive Steve Armitage said operators were banking on a busy summer, ahead of quieter winter months.
“They’ll be hoping they can drive enough revenue, enough foot traffic through the doors to keep things going through that.”
The sector had also been hoping for more international visitors, with tourist numbers previously only at about 85% of pre-2019 figures, Armitage said.
Young said growing consumer confidence this year depended on two key factors.
“We really need to see job security and reduced expenditure for core items for consumers and if we can get that, then we’ll be good.”
