"There is a general weakness in some parts of our retail environment and it comes back to people spending. They haven't got enough to spend as they are still paying down debt."
Some disturbing figures out this week on grocery spending were a sober reminder that all was not well in some families who were feeling the effects of rising food prices, he said.
People were becoming stretched in various ways. If the National Agricultural Fieldays, at Mystery Creek, encouraged farmers to spend, Dunedin and Otago retailers could receive some benefit.
But there was a big "if" over that spending and whether it would happen, Mr Timms said.
The listed retail companies were showing varying degrees of stress. Yesterday, Kathmandu Holdings announced it was expanding and Pumpkin Patch announced it was closing United States stores and rethinking its United Kingdom operations.
Mr Timms said the company was keeping its US warehouse operations and its web presence, deciding that US parents were more inclined to go online to buy their baby wear than go shopping in its stores.
Hallenstein Glasson had also recently issued a warning about reduced sales and how the start of a late winter had reduced sales in its winter ranges.
Kathmandu had a range of gear that people wanted to wear because of its good name, he said.
"They aggressively discount, they source their stuff from overseas and the gear they are putting out is trendy and people want to wear it. It may not be the best quality, but you get `bang for your buck'."
Pumpkin Patch was finding the retail environment tough in the US and UK and needed to rethink its strategy, Mr Timms said.
The company's share price fell nearly 10% after the announcement, surprising Mr Timms, who believed the restructuring was positive for the company.
In New Zealand, seasonally adjusted total retail sales values rose 2% in the March quarter, the largest rise in four years, Statistics New Zealand figures released yesterday showed.
Increases were recorded in all regions, except in Canterbury, which was down 2.2%.
ASB economist Christina Leung said the figures pointed to a gradual recovering in retail spending taking shape earlier this year.
"It is particularly encouraging to see spending outside of Canterbury holding up well."
The recent improvement in housing market activity looked to have underpinned some recovery in consumer confidence and encouraged households to spend, she said.
However, Mr Timms said that while there were plenty of people on Dunedin streets, and they were visiting shops, he was not convinced they had restarted spending in a manner that indicated a recovery.
