But the Dunedin City Council says it has always acknowledged the work is disruptive and Dunedin businesses are being affected by other economic forces at play.
The Outpost co-owner Paul Currie, of Queenstown, said the Dunedin store was set to close in November after about seven years in business in George St.
It was a "huge cost" to close a business, and they would be walking away from the Dunedin store with tens of thousands of dollars worth of debt, he said.
While the Covid-19 pandemic had created a challenge for all, the roadworks in George St that followed were the "primary factor" for the closure and the store had run at a loss for several months because of them.
It had caused a more than 60% reduction in their foot traffic over the past two years, even though the section of the street the store was on was not upgraded, due to the removal of carparks and general difficulty in accessing the George St blocks.
The upgrades were completed in May this year.
The roadworks had changed the way Dunedin’s population did business in the city and people might be avoiding George St, and even the Octagon to some extent, Mr Currie said.
The way the upgrades had been handled was "atrocious", he said.
Other local retailers have made similar comments and the council has recently said that bigger forces, such as falling sales volumes and rising liquidation rates, are at play that are affecting retailers across the country.
"We believe these forces are far more relevant for retail outlet closures in Dunedin than the George St upgrade," a spokesman said.
But Mr Currie labelled that position as "a smokescreen", a "deflection" and "totally inappropriate".
"What is their qualification to be able to even make that comment?"
There was a "huge" number of factors that could contribute significantly to business, he said.
"But the bottom line in retail is you’ve got to have customers, and if you cannot have customers then your retail is going to struggle.
"The George St road development has reduced significantly the number of customers in that precinct — end of story."
Mr Currie believed a "point of inertia" was coming where the number of closed shops in the area would become disproportionate and customers would be less encouraged to visit the business precinct.
He said the council should have offered rates relief to those affected by the roadworks.
He understood the council had been approached by numerous landlords and people on the topic.
"And they’ve either literally avoided answering it, or not really engaged with that or basically deflected," he said.
A council spokesman said they had always acknowledged the work in George St did cause a level of disruption, and had outlined "many times" the steps they took to minimise this and support businesses affected by the work.
"But it’s also true Dunedin businesses continue to be affected by the economic forces at play across New Zealand."
It was pleasing to see that the new-look George St was already attracting significant interest from new retailers, and the council expected this more positive outlook to continue to grow as the economic factors at play in New Zealand improved, he said.
"We also expect our retailers right along George St will benefit from fit-for-purpose infrastructure and a more welcoming, people-friendly main street for years to come."
In June, as the number of empty retail stores across the three main shopping blocks of George St reached 16%, commercial property valuer Adam Binns, of Quantify Consulting, said a mix of economic conditions, a possible move to online retailing and "maybe, to some extent" the roadworks in George St were to blame for the spike in closed businesses.
He looked forward to the possibility of more positivity along George St following the completion of the roadworks.
International retail chains Seed and Mecca are to open stores in George St this month and New Zealand clothing chain Repertoire recently opened a new outlet in the street.
Meanwhile furniture store Smiths City is relocating to Crawford St from the Meridian Mall, and Bodyshop, which was in the Golden Centre in George St shut up shop last month.
Other local business owners backed up Mr Currie’s view on the impact of the roadworks.
Blueskin Bay Skincare, Honey and Supply Co director David Milne — whose business recently moved from Stuart St to a temporary pop-up store in George St — believed the roadworks were a unique force that retailers had faced which "could be the difference between hanging on, and not".
It was a "contentious issue" as to whether there should have been complete rates relief.
The Perc Central, Exchange and Plaza co-owner Sarah Hussey said despite not being in retail, she had not realised the impact road closures would have on them during ongoing works on old water pipes under streets near their Stuart St cafe, where trade had "almost halved".
"You can’t tell me that that’s the economy."
Unless they had owned a business themselves, she did not believe the council truly understood the long-term effects the roadworks were having, Mrs Hussey said.
