The Speight’s Ale House closed last week, while restaurant Armdadillo's, which is across the road, closed earlier this year.
New eateries opening in the area and rising costs of running the business were cited as reasons for the ale house closure.
Owner Tony Potts believed there were too many eateries in the town competing against each other, and he would not be surprised to see more closures.
Ashburton Mayor Neil Brown agreed.
“A business shutting down is always a concern,” Brown said.
“People will go where they like.
“I’m not sure what else council can do apart from supporting them through our economic development agency, and attracting more tourists.”
The cost of living crisis is biting, and with two quarters of negative growth leading to a recession, it's tough economic times, Brown said.
The library and civic centre, Te Whare Whakatere, opened earlier this year in the CBD and it contains an espresso bar.
The council was cautious of making sure it didn’t compete with existing businesses and had local café One Ninety Nine relocate from within the CBD, Brown said.
The council spent $15 million on the re-vitalisation of the town centre just two years ago.
In the meantime, the number of vacant shops scattered around the CBD – the area bordered by Havelock, Cass, Moore, and East streets, is increasing.
The council’s plan change 4 in 2021 aimed to strengthen the role and function of the CBD as the primary commercial, retail, recreation, cultural and entertainment centre for the district.
It hasn’t stopped big box retailers setting up on the fringe of the CBD.
The River Crossing precinct opened at the end of 2022, with K-Mart and several eateries, while on the other side of SH1 Briscoes shifted out of the CBD to set up next to a new Rebel Sport, with a Chemist Warehouse also opening next door in 2023.
Business Canterbury’s Mid Canterbury business advisor Jason MacRae said the arrival of big box stores and national brand eateries is a sign that Ashburton is growing, and is seen by the rest of the country as a great place to do business.
“Unfortunately, the timing of this increased competition has aligned with local businesses facing the cumulative impacts of rising costs, dwindling consumer demand as household budgets also feel the bite of inflation, and the lingering effects of labour shortages.”
A report by Infometrics in December found that the value of electronic card spending in Ashburton's CBD had been relatively consistent since October 2021.
Figures released to the council last week showed tourism spend was on the increase.
Brown was sceptical about the reliability of the numbers, but chief executive Hamish Riach said the focus should be on the trend, which was an increase in tourism.
- LDR is local body journalism co-funded by RNZ and NZ On Air.
