Is the North ringing with the sound of wallets opening?
Economic conditions are turning in favour of retail spending
Victoria Square: one of the most expensive shopping centre ever built in the North is experiencing a revival
Consumers are happy to spend again in the North – at least that is what a new consumer confidence survey is telling us. Latest research from Danske Bank suggests falling inflation, a recovering housing market and improved job prospects are all helping to re-establish a more positive outlook when it comes to spending cash.
Of course, it is only people with a job who are feeling more confident, according to the bank. If you are one of the estimated 66,000 people out of work – or one of the 559,000 “economically inactive” – personal finances are a completely different matter.
But, according to Danske Bank’s chief economist Angela McGowan, in general, working households are “anticipating that their financial position should improve in the year ahead” and with it their “spending expectations”.
Consumers vs retailer exodus
But will a surge in consumer confidence make any impact on the exodus of retailers from towns and cities across the North? Local retail vacancy rates are the highest in the UK, with boarded-up shops and fake shopfronts a feature of every high street and rural town.
According to Paul Wilson from BTW Shiells, one of the largest commercial and residential estate agencies in the North, it is a reflection of how the retail sector was first hit by the recession and is now driven by a different dynamic.
Wilson highlights the growth of what he describes as “the value sector”, particularly discount retailers, as one of the strongest trends in retailing. He says this reflects consumer demand and he is not overly optimistic empty retail units will disappear anytime soon.
“Northern Ireland suffered from the knock-on effect of certain big-name retailers going into administration. We see that everywhere and I think the outlook for some rural towns will remain challenging. But, in larger towns and cities, there is definitely more confidence about.
“Many of the larger shopping centres, like Forestside and Abbeycentre on the edge of Belfast, have 100 per cent occupancy. They have reinvented themselves and are very positive,” Wilson says.
Reinvention is the buzz word when it comes to securing a retail sale these days.
A scheme just launched by the Department of Social Development – the Business Improvement District (Bid) pilot – aims to help seven key retail areas in the North attract more shoppers and visitors.
The Lisburn Road in Belfast, which promotes itself as the city’s “premier shopping district” with luxury boutiques and restaurants, is one of the areas taking part in the pilot. Belfast’s Cathedral Quarter and city centre are also participants.
It highlights the intense level of competition in the retail sector in Belfast alone – and it is being fuelled by a revival at one of the most expensive shopping centres ever built in the North; Victoria Square.
The centre, owned by the German fund Commerz Real, opened in 2008. Home to high-end retailers from House of Fraser to Apple, it is a nice indicator of whether local consumers really are happy to spend and if big-name, international retailers still rate Belfast.
When it first opened, it was a must-visit destination for southern shoppers. Then the crisis hit and these shoppers and some tenants took flight.
Now some of the southern shoppers are back, although these days it is visitors from different European destinations who are more likely to be spending money in Victoria Square.
According to Criona Collins, also of BTW Shiells, who is the centre’s asset management and leasing agent, the square is back on the map for retailers looking at Northern Ireland – some for the first time. “It’s a flagship destination and, in the last 12 months, there has been a number of new lettings and expansions by existing retailers and we are currently in discussions with others.”
She believes this is in part because last Christmas Victoria Square recorded its best trading figures since it opened. House of Fraser alone reported sales growth year on year of 23 per cent.
“People are no longer scared to go out and shop,” she says. “The figures prove that.”