Shops braced for winter of discontent

While some retailers are still doing solid business, footfall in shopping malls can be deceptive these days, writes LAURA SLATTERY

THE KIDDEZ Kabs are missing their toddler passengers, but there is little else in the impressively thronged Friday morning malls at the Blanchardstown Centre to suggest 2009 is a year in which the Irish retail sector has shed more than 30,000 jobs. On the surface, at least, it is business as usual at the beginning of its 14th Christmas season: gargantuan trees bedecked with golden balls, and polar bears clutching Coke bottles over Santa’s grotto.

But footfall can be deceptive. On weekdays, “the centre” is somewhere local people go. Spending, however, is entirely optional. “People say, ‘I’m browsing’. They’re trying something on, then they’re saying, ‘I’ll come back when I’m paid’,” says Joe Gavin, the centre’s general manager.

Weekend traffic has dissipated. The Louth, Meath and even Midlands shoppers who used to come here are either staying at home or heading for the sterling zone. “It’s a very difficult time, but we need to be positive. It’s just unfortunate that we have the Budget on the 9th of December, when December 8th is such a traditional shopping day,” says Gavin, clearly perplexed by the Government’s timing.

Still, with 132,000 people living within a 10-minute drive (compared to 94,000 in 1996) and vacated units attracting new tenants faster than you can say “I prefer Dundrum”, Blanchardstown has got much more going for it than most suburban shopping centres.

I’m probably biased though, because I used to work here. In its first two summers, 1997 and 1998, I sold schoolbooks to local parents at a time when Debenhams was still Roches, there were no Starbucks (there are five in the centre now), and schoolchildren in the area outnumbered school places.

The Irish economy was swelling thanks to a genuine boom, as opposed to the credit-fuelled madness that came later. The young, fast-growing greater Dublin 15 population flowed through the red, green, yellow and blue-coded entrances and carried home newfangled devices called DVD players. For years, the centre, developed by Green Property, was somewhere you would avoid on a Saturday if you could help it: all those 7,000 parking spaces might be free, but they never seemed to be empty.

Now some of the fervour has faded. “On a Saturday, the car park used to be full at 10 o’clock, now it’s 12 o’clock,” says Alma Doyle, owner of Inspiring Ideas, a craft shop in one of the main centre’s three satellite retail parks, all of which add up to a 1.25 million sq ft of retail space (compared to Dundrum’s 850,000 sq ft).

Inspiring Ideas is doing solid business, despite being surrounded by moribund, Ikea-decimated furniture stores such as Reid’s, where sofas in sickly hues are selling for half price, and Harvey Norman, the Australian retail chain that has publicly expressed regret about expanding into Ireland.

“When the others were doing the big highs, we were looking at them and wondering, ‘oh, should we be doing the big highs?’. But now they’re experiencing the lows and we’re holding our own,” says Doyle. “We’re very specialised. They’re all regulars, hobby people,” she says, gesturing to the customers milling around us. But the make-do-and-mend spirit that’s supposed to attract new people to the joys of haberdashery in a recession doesn’t really exist, she says. “They aren’t teaching it in schools. You hear young people saying they like the buttons, but then they’re asking each other, ‘Do you know anyone who can sew a button?’”

Recession brought Bart Glover and his wife Bernie the opportunity to move their Blanchardstown cafe business to bigger, vacated premises: Kay’s Food Hall now occupies a unit that a decade ago was filled by Bewleys. “We’re the only ones we know that are doing roast beef,” says Glover. “When everyone else downskilled, we upskilled. But we look down on the [food service] industry in this country. We still look at it as if we’re serving the British monarchy.”

The new Kay’s has a Wok station. It also has an area where parents can heat up milk bottles for babies – it’s right next to a Mothercare, after all. “We’re somewhere people can bring their kids and get a hot meal, with a knife and fork, on a budget. It’s not food that’s cooked off site, it’s fresh. But nobody matches the efficiency rates that we do – for every €1 we take in, we used to keep 62 cent, now we keep 76 cent,” he says.

The centre is 98 per cent occupied, which is well above average. But the bloodbath on the British high street this time last year means there have been comings and goings. Zavvi, which took over the original Virgin store, was sunk by the failure of Woolworth’s distribution subsidiary: it’s now been replaced by Schuh – 4,500 sq ft of footwear for a centre that once upon a time was deprived of decent shoe outlets. Meanwhile, Topshop waved goodbye to its neighbour Principles (a victim of Iceland’s economic collapse) and opened a sale unit adjacent to its existing store: next March it plans to knock through to form a 10,000 sq ft flagship.

Gavin shakes his head when I tell him I worked in the bookshop downstairs. Books are having a subdued time of it – a nationwide trend, but here it’s also the result of a wave effect from last July’s closing down extravaganza at the beleaguered Borders.

“Avid book fans were in there filling up shopping trolleys,” says Gavin. There are only so many books a person can buy before they have to read the ones they’ve already purchased.

With an estimated 12 per cent of its customers foreign nationals and 55 per cent in the 15-44 age bracket, the centre is exposed to local migration and unemployment trends. Leo Varadkar, the Fine Gael TD and former Fingal county councillor, who lives on the nearby Carpenterstown Road, sees definite evidence of outward migration in the shortening queue for school places.

“The demand that was there two years ago has receded. I think a substantial number of EU nationals have gone home, although we’ve no way of quantifying that. We would also see from the breakdown of where people are claiming benefits that it is young areas like Clonee and Clonsilla that have seen the biggest rises in unemployment . It indicates what we already know, which is that young people are bearing the brunt of the recession.”

Even with an upward re-evaluation of Fingal County Council rates kicking in for its retailers next year, the Blanchardstown Centre’s tenants will be okay, Varadkar reckons. “What has been harder hit is the smaller retail centres. You see a lot more vacant units and a move downmarket into takeaways and so on. A lot of them have sort of been in the twilight zone since the Blanchardstown Centre opened anyway.”

The State-wide economic malaise doesn’t help Green Property’s approved proposal for a 300,000 sq ft extension to the yellow mall, which will include a new anchor store, 17 additional units (all with fashionably large floor areas) and seven restaurants, which will be outward-facing to improve after-hours trading.

“We have the option for the next five years,” says Gavin, showing me a flipchart of the floor plan in his office. Retailers like Gap, Cult and Republic want in, he says. “We feel there’s a draw to bigger centres and this is the way retail will go.”

Series continues tomorrow with a look at Athlone.

In numbers

€46- average value of retail transactions in the third quarter, down from €67 in the same period last year, according to REI.

12- percentage of our income that we are now saving, up from 2.3 per cent in 2007.

422,500- number of people claiming jobseekers' benefit and assistance in Ireland in October, according to the CSO.

0.4- percentage rise in core retail sales (excluding cars) in the third quarter compared to the second, according to the CSO, bringing some comfort to retailers.

40,000- net migration forecast from the Economic and Social Research Institute for the year to April 2010.

Subdued spending: how Ireland became a nation of window shoppers

IT'S NOT just Blanchardstown: a number of retail areas around the State are reporting that shoppers are still streaming in, but the tills aren't ringing anywhere near as feverishly as the retailers would like.

Average transaction values have plummeted: figures from industry group Retail Excellence Ireland (REI) suggest that, in the third quarter, consumers spent the smallest amount per transaction in more than two years.

Falling prices play their part in this, but REI's chief executive David Fitzsimons believes the more modest spending is also a result of a more cautious mood. He, like Joe Gavin, thinks the slightly later than usual timing of the budget could "kill consumer spend" this Christmas.

So why are things so quiet? Ireland's spiking unemployment rate, which has seen the Live Register surge by more than 250,000 people over the last two years, immediately sucks income-earning consumers out of the system. The return of net migration, too, means there are simply fewer customers to go around. And for the consumers who have stayed put and held on to their jobs, the combination of falling wages, higher taxation and a credit squeeze have made window shopping the only affordable kind for many.

Those who do have cash to spare are hoarding it. Ireland's savings ratio – the ratio of savings to income – has shot up. This "precautionary saving" reflects consumers' fears that job losses, tax hikes and pay cuts are far from over.

Some economists believe the savings ratio has peaked and will ease in future months, with lower prices enticing people back to their former shopping habits.

But this Christmas, it might yet be a case of a little bit of what you fancy, not a lot. The buyers' remorse – and the overdraft charges – would just be too much for most of us to bear.