The economy’s tectonic plates are shifting beneath the ground occupied by retailers, as the closure last week of the Bewley’s cafe on Grafton Street in Dublin showed. It eventually crumbled under the weight of its annual €1.5 million rent for its prime spot on the middle of the capital’s main retail thoroughfare.
Even before Covid-19, retailers in that area of the city were rebelling over rents and vacancies on our prime shopping strip were becoming commonplace.
When consumers venture back out into the post-lockdown streets in phases over the summer, they will find a landscape that is vastly different from the one that existed there before the crisis. Irish shopping streets are undergoing dramatic change wrought by several separate forces.
These include the straightforward effects on consumer spending from the decline of the economy caused by the virus, as well as capacity reductions due to social distancing measures and a deep-rooted consumer fear of venturing outside. Retailers are also being buffeted by a shifting commercial property landscape, a lockdown-fuelled acceleration of the shift to online shopping, and, most strikingly, spillover effects from the carnage on the UK retail high street.
Since the lockdown restrictions began in March, the Irish divisions of UK retailers Oasis, Warehouse, Debenhams, and Laura Ashley have all entered insolvency. The Dundrum base of House of Fraser closed its doors in February. When the big British retailers sneeze, their operations here catch the same virus.
Under the Government’s proposed post-lockdown economic reopening plan, it could be August 10th before all retailers, including those in shopping centres, are allowed to trade. It will be interesting to see how many of them can afford to lift their shutters, and how many will stay closed forever.
Due to the crisis, Irish retailers will require various forms of State assistance for months, if not years, to come. Our shopping streets may never look the same again.