Tauranga’s CBD hospitality businesses: Spending down, margins tight
Tauranga City Council data shows foot traffic at the corner of Wharf St and The Strand has fallen to 1008 people a day in February 2026, down from 1819 in February 2025. Photo / Kaitlyn Morrell
Tauranga CBD hospitality businesses are fighting an “uphill battle” as costs rise, people spend less, and margins are “extremely tight”.
Two owners and two sector representatives have spoken about the challenges, with one local trader saying sales have dropped significantly.
Their comments come after The rel="" title="https://www.nzherald.co.nz/bay-of-plenty-times/news/tauranga-pub-crown-and-badger-closes-after-26-years-on-the-strand/UGB76M45NZB43LL44SYZAUAPZA/">Crown and Badger closed in early May after 26 years on The Strand.
The pub’s owner told the Bay of Plenty Times the business had been “battling for years” with Covid-19 impacts, inflation and declining consumer spending.
The Grocer cafe and restaurant on The Strand opened in March, and owner Ian Harrison has worked in hospitality in Tauranga’s CBD since 2015.
He said the “realism” since opening was that he was “easily down” 40% in sales compared to his forecast.
“Knowing full well I was about to come into winter, knew the market, knew that I wasn’t overestimating my numbers, and I kind of knew what I would be in for.”
Harrison said there wasn’t a “saving grace”.
“It doesn’t matter how much food costs, wages costs, rent costs ... if you don’t have the turnover, you don’t have the working capital, you don’t have a business.”
Tauranga City Council data showed average daily pedestrian counts for February at the corner of Wharf St and The Strand had fallen over the past four years.
In February 2023, the average was 2336 pedestrians per day, rising to 2568 in February 2024.
This dropped to 1819 in February 2025 and fell to 1008 in February 2026.
Harrison said The Grocer was trying to be a “good venue”, and he encouraged people to come into the city more often.
“I think that’s what the city really needs, independent businesses that are willing to strike their little patch.”
He compared Tauranga to Raglan when looking into how the CBD had changed over time.
“Raglan wasn’t designed to be a city, and neither was Tauranga really, but for whatever reason we all chose to move to paradise.”
He said it was like trying to build a beach town into a city, which would take time.
“If everyone doesn’t chip in, doesn’t start coming to the city, keeps talking about the bad things and don’t start talking about the good things, then nothing’s ever going to change.
“It’s just going to be a real uphill battle for the people with businesses here and for the people that work here.”
Little Long Espresso owner Amy Joyce, whose business is on Spring St, said daytime foot traffic had changed over the past few years.
“There are still good days, but customer flow feels less consistent than it once was, and many CBD hospitality businesses are having to work much harder for the same level of trade.”
She said rising costs were the biggest pressure facing daytime operators. This included wages, food costs, utilities, and rent.
“Combined with softer and less predictable trade, for many smaller owner-operated cafés, margins are extremely tight.”
“While most business owners understand the long-term vision for the city, the ongoing disruption, parking difficulties, road changes and accessibility issues have made it harder at times for customers to quickly and easily visit the CBD.”
She said cafes were “heavily dependent” on weekday office traffic and daytime convenience, and had noticed a shift in office worker patterns.
“Hybrid working and more flexible work-from-home arrangements seem to have reduced the regular Monday-to-Friday customer base that daytime cafes traditionally relied on.”
Joyce was still “optimistic” about the CBD’s future and said Tauranga was growing “rapidly” with lots of city centre investment.
New developments in the CBD include Te Manawataki o Te Papa, a $306 million council civic precinct project that includes a civic whare, exhibition gallery and museum, new library and community hub.
“The CBD has strong potential to become a much more vibrant and attractive place for both customers and businesses again,” Joyce said.
“The challenge for many operators is simply navigating the current transition period.”
Hospitality NZ chief executive Kristy Phillips said the organisation had heard from Tauranga members about the central city’s “operating challenges”.
She said hospitality businesses across the country were facing challenges since Covid and as people spent less.
“Locally, these factors have been further exacerbated by projects impacting foot traffic and accessibility of the central city.”
Phillips said Tauranga’s issues largely related to “placemaking, attractiveness and vibrancy”.
Downtown Tauranga manager Genevieve Whitson said the hospitality sector continued to face ongoing challenges nationwide, particularly among Mainstreet organisations.
“This is due to a number of factors, including the fuel crisis, people are pulling back on non-essential spending, and also due to the current financial market.”
She said Downtown Tauranga was “very sad” the Crown and Badger closed as it had been an “iconic” part of the city centre.
“This plays into the bigger challenge for the hospitality sector nationally right now and is not isolated to just this area.”
Tauranga City Council previously told the Bay of Plenty Times that, with the city centre undergoing a significant period of transformation, council staff worked alongside businesses to minimise disruption and provide ongoing support.
The council also said it had heard strong feedback about parking and understood the concerns being raised.
“We know people need to be able to access the city centre easily, and our approach is focused on maintaining availability and turnover so visitors can find short-stay parking, while also accommodating weekday commuters.”
Kaitlyn Morrell is a journalist for the Bay of Plenty Times and Rotorua Daily Post. She has lived in the region for several years and studied journalism at Massey University.