Last week British Prime Minister Tony Blair appealed to people to go shopping and take holidays to prevent the economy falling into recession in the aftermath of the attacks on New York and Washington.
In Britain and the US, sales of non-essential items like fashion, furniture, white goods and others at major retail outlets have suffered following the attacks three weeks ago.
As shoppers stayed at home, sales plummeted, exacerbating the uncertainty underlying a market already feeling the squeeze from global recession.
Is the downturn in the economy, along with the knock-on effects of the attack, having an impact on retail in Dublin? While like-for-like retail sales figures in Dublin have slipped slightly in the last two weeks, industry analysts are slow to link this fall-off with the attack.
New figures from Insignia Richard Ellis Gunne show that footfall on Dublin's prime shopping streets since the US tragedy rose significantly over the same period in 2000.
The study calculated that the footfall in the third quarter was 36 per cent higher than in the same week last year. An average of 16,500 pedestrians per hour were recorded on Grafton Street on Saturdays compared to 14,500 during the same hours on Henry Street. An increasing number of shoppers are also availing of the late-night opening on Thursdays when each street recorded 10,000 pedestrians per hour.
Cormac Kennedy, head of retail at Insignia Richard Ellis Gunne, said Ireland benefited from a uinique situation and the market was not over-supplied in terms of retail space. He was confident that the prime shopping streets would continue to perform strongly.
Stephen Murray of Jones Lang LaSalle says retail sales are always among the last to be hit from a slowdown in the economy. "While it's business as usual after the attack on the World Trade Centre there is an element of uncertainty in the market over current economic conditions."
Larry Brennan of Hamilton Osborne King remains very confident about the retail market in Dublin. "We completed the legals on a number of transactions including retail outlets and warehouses in the last two weeks, and despite the talk of a slowdown so far, nothing has been dropped by retailers fearing a slump in the market," he said.
The British Retail Consortium, trade body for retailers, said it expected sales for the two weeks after the disaster to be "exceptionally subdued".
US retailers reported a slump as American shoppers stayed safely indoors. Sales fell by 3.5 per cent after the attack according to retail researchers Redbook.
Since the events three weeks ago, a number of established retailers on both the American and European continents have issued profit forecast warnings.
Despite the unpredictability of the market at present, retail turnover figures are still up on last year and double digit growth is still being achieved, according to Stephen Murray. "There are no signs of property coming available on the market, which is always a manifestation of difficulty over a few months."
Tom Coffey of Dublin City Centre Business Association (DCCBS) fears that the drop in tourism following the attack will result in a tightening up of the Dublin market. "Tourism from America is predicated to be down 30 per cent as the airlines cut their capacity on transatlantic routes. So tourists from the US won't be coming here at previous rates."
According to data compiled by the DCCBS, fashion sales were up 10 per cent for the months of June, July and August, food sales were up 6 per cent in June, but only saw 2 per cent growth in July and August.
Stephen Murray pointed out that the availability of retail outlets in Dublin was still limited and was likely to stay that way.
"The vacancy ratio in the market is extremely low and there's no new large shopping centres due to open until around 2004. We still have a situation where the heat and strength has been shown by the high key-money paid to secure a prime location," he said.
However he expects rental value growth to be less spectacular than previous years. In a slowdown period then retailers usually reassess their products and start selling cheaper lines according to Larry Brennan.
"Retailers can adapt to business and market requirements fast by changing their product lines and squeezing their margins. So the slowdown won't have that much of an effect on them."
