Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Irish hope their luck is turning

Marks & Spencer is among the retailers “feeling better” about trade in the Republic of Ireland after it saw signs of improvement in trading in a country ravaged by recession for the past two years.

Speaking at its full-year results last month, M&S group finance and operations director Ian Dyson said: “We’re coming out of the troubles in Ireland.”

The sentiment has been echoed by other multiple retailers trading in the country, which experienced job losses of about 30,000 across the retail sector in 2009 and sales slumps of up to 14% in clothing and footwear in December.

One key multiple retailer told Drapers that the main trading lows had been annualised and there are signs of an improvement. Colin Temple, managing director of footwear chain Schuh, also agreed that things are starting to look up in Ireland. “It’s getting a little better. Over the past six to eight weeks we have seen little green shoots,” he said.

However, such statements have been cautiously received by industry observers and indies operating in Ireland, who have been deeply scarred by the severe recessionary conditions.

Torlach Denihan, director of industry body Retail Ireland, is tentative about using the word “recovery” but believes the sector has bottomed out. “The retail sector experienced a vertical fall last year but it has stabilised now,” he said.

“The fact that the Government moved aggressively last year, taking pretty drastic action, means the economy is no longer in freefall,” he added. “There was a lot of bad news in terms of unemployment but those still in work may feel that the axe has swung and they are safe.”

This was borne out by a consumer sentiment index for May, which was conducted by Ireland’s KBC Bank with the Economic and Social Research Institute (ESRI), which showed that confidence remained steady in May at 65.3, compared with 65.5 for the previous month. Consumer confidence hit its lowest ebb in Ireland in July 2008 when the index slid down to 39.6.

KBC chief economist Austin Hughes said: “It remains the case that Irish consumers are very cautious about the general economic outlook and their personal financial situations. But the trend in sentiment in recent months hints that consumers are seeing signs that the Irish economy is stabilising and may be starting to improve.”

Recessionary pressures have led to changing shopping habits in the Irish clothing sector, according to Denihan, notably a major reduction in cross-border shopping.

This has been driven by substantial price reductions in Ireland - on average, prices are down 11% year on year to April - as well as a rise in petrol costs.

Figures from Retail Ireland also show signs of improvement, with volume sales up 9.6% at department stores and 4.8% in dedicated clothing and footwear outlets in the year to the end of March. However, the decline in prices means value sales are still in decline - down 4% in department stores and 7% in clothing and footwear for the same period.

However, here too there are positive signs, as in the year to December 31, 2009 value sales were down 15% in department stores and 14% in clothing and footwear shops.

Louis Copeland, owner of the eponymous Dublin-based men’s tailoring and ready-to-wear mini chain, said last month’s trading was its best in the past two years, after it clocked up a 15% increase in sales compared with the same month last year.

“People are more positive, the weather has improved and there is more confidence. After the difficult two years, people are now saying ‘we have to live. We’ve got to move on’,” said Copeland, although he would not be drawn on autumn’s outlook.

The multiple retail source who talked of an improvement in trading added that the Irish market could provide an interesting comparison for the UK, which is set for a stinging set of tax rises and public spending cuts to stimulate the economy as part of the new Con-Lib Government’s upcoming Budget due on June 22.

He said: “The UK should watch Ireland as it comes out the other side of its Government’s action, as the UK could face a similar prospect.”

While many retailers, like Denihan, are too nervous to call a recovery in Ireland, they agree there are signs the volatility of the past couple of years is levelling out.

With that in mind, Denihan warned that retailers will still struggle to prosper because the overall market has contracted.

Retailers have struggled to fund the necessary price reductions - New Look partly blamed Ireland for a 12% drop in international like-for-likes - while coping with landlords that have refused to lower rents. Upward-only rent reviews have since been abolished in new contracts but many retailers are lumbered with them in their existing contracts.

For menswear independent Geraghty’s of Galway, trading in May has improved but, so far, it is not consistent. Sales manager Paul Geraghty said: “We get a run of weeks where things are looking up and then it will be followed by a shocker. It’s two steps forward and one step back.”

Signs of recovery?


Rise in sales by volume at Irish department stores


Rise in sales by volume at specialist clothing and footwear retailers


Decline in sales by value at department stores


Decline in sales by value at specialist clothing and footwear retailers

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.