Budget, consumer confidence bring festive cheer for retailers

Transaction surge creates glitch for some Permanent TSB cardholders

Whisper it but the retail trade is ever so slightly kicking its heels in the air and crossing its fingers that the weather will be as kind as business has been of late and deliver a better Christmas spend than last year.

"The view is that this Christmas is stronger and better than last year," says David Brennan, chief executive of the Dublin City Business Association.

As an indication of the volume of business, at lunchtime yesterday, some Permanent TSB cardholders found temporary difficulty completing transactions. A number of card sales were “timed out” when clearing computers were unable to cope with the volume of sales within the time allowed for processing, usually 20 or 30 seconds.

AIB reported no recurrence of its earlier and separate ATM/debit card problem.

With today being the final shopping day before Christmas (but only one day to go before the start of the post-Christmas sales – Dunnes Stores online sale starting on Christmas Day), several people in the retail section said they expected this year’s spending season to be as good as, if not a little better, than last year.

Several factors are at play – a general rise in the level of consumer confidence, the weather (bad for some; good for others), and what retailers regard as an “extra day” for shopping compared to last year.

"It's been a good few days," says Don Nugent, director of Dundrum Town Centre, one of the main south Dublin retail centres.

“The weather did have a role to play – first the mild weather didn’t do anything for sales of coats and the like, but then we had the adverse weather, which is good for us with our covered car park and with the centre itself being indoors.”

Overall, he expects this year to be “at least as good as last year”.

For Mr Brennan and Dublin city traders, the season got off to a good start with the mid-October budget.

“We absolutely totally, utterly welcome the early budget,” he said. “It certainly is more advantageous to an area that employs many people who are dependent on trade and spending for their livelihoods.”

With the budget out of the way, and perhaps not as awful as some feared it might be, people were a “little more relaxed”; come the Christmas spending season, there was “much more consumer confidence” compared to last year.

He also praised the Luas, Dart and Dublin Bus for providing services people were using in increasing numbers, and the Garda Síochána traffic management which kept vehicles moving.

“People are coming into town again. Restaurants and licences premises are doing very well. The lower Vat rate for restaurants, which was kept in the budget, has made, and continues to make, a big difference.”

He doesn’t know about the average spend yet but his gut instinct “is that people have been spending more than last year but remain more cautions than before while also spending a bit more. We’re up. Things are very solid. At the end of the day, we’re content.”

Last year, Christmas Eve was on a Monday. This year, it is Tuesday, thereby delivering that “extra day” for shopping. Mr Nugent sees this as a factor, one among several.

“There’s still an element of caution and people are still looking for value but that’s not a bad thing and, in many instances, they are getting it. There’s a certain level of confidence out there. No one is cracking open the champagne, but it’s better, for sure.”

Like Brennan, he does not have a read yet on the value of spending but by one yardstick – Dundrum Centre gift cards – it is up. Sales of cards are up about 5 per cent and the value of money being placed on the cards is about 6 per cent up on last year.

Those cards will, he expects, bring people back into the centre in the immediate post-Christmas days – as will the fact that Marks & Spencer is open on St Stephen’s Day for the first time.

Another indication on spending is what happened for two of the centre’s new outlets, Michael Kors, a New York-based fashion house specialising in clothing for women as well as handbags, jewellery and accessories; and Superdry, a American-Oriental fusion fashion house.

Both have seen their post-opening sales exceed expectations by more than double digits, says Mr Nugent.

A slightly less buoyant view comes from David Fitzsimons, chief executive of Retail Excellence Ireland, who predicts Christmas 2013 trade will be marginally down on 2012, based on listening to 300 retailers yesterday

“Up to last Friday, we would have been rather bullish but it now looks likely retail sales will be back to 2012 levels,” he said, citing bad weekend weather.

Post-boom caution has also seen a jettisoning of the special outfit for Christmas and REI predicts that sales will be down, marginally or significantly, in men and women’s clothing, foot wear and electrical goods.

However, luxury brands are enjoying bumper sales, they say; provincial towns are enjoying a pre-Christmas sales boom following a good year for farmers and returning family members last weekend; and REI also sees potential for better than usual post-Christmas sales.