Retail sales have collapsed this year -- spurred by consumer concerns about unemployment, and a paralysed economy. Fears of another unforgiving Budget next month and of rising interest rates next year have given a further knock to consumer confidence in the run-up to Christmas.

Belt-tightening consumers are set to spend about a fifth less on their Christmas shopping this year than last -- a move which will push Christmas sales, traditionally the busiest time for retailers, off the proverbial cliff. According to a recent survey by retail lobby group Retail Ireland, almost half of retailers expect to lay off staff by the end of this month -- before the Christmas shopping season even begins.

Any slump in Christmas trade will be a bad omen for the year ahead. Already, 30,000 jobs have been lost in the retail sector -- there will undoubtedly be more casualties in the New Year.

"Many retailers will battle on to the much anticipated Christmas period, after which the fate of many will be decided," said a recent report by Retail Excellence Ireland.

To tap into the disquiet on the streets ahead of Christmas, the Sunday Independent asked some top retailers how they've held up over the last year -- and what their expectations are for Christmas and the New Year.

Peats World of Electronics

down 20 per cent

"Like everyone in the electronics business, trade has gone back to 2003/2004 levels -- but, unfortunately, with 2009 expenses," says Ben Peat, chairman of Peats.

"Consumer electronics were always a discretionary spend, so trade across the sector is dramatically down on the boom years. People are buying smaller products now -- instead of changing an old laptop for a new laptop, they are buying new memory or hard drives for the old laptop. Our sales are about 20 per cent down on last year. The price of TVs and so on has fallen by about 20 per cent, so we have a double whammy to contend with."

The Christmas season brings in about 60 per cent of the company's annual trade, according to Peat, who isn't pitching his hopes for Christmas sales too high.

"I would count myself lucky if we matched last year's figures," says Peat. "The Christmas season will probably start later this year and it will probably be shorter."

Korky's

Down 20 per cent

John Corcoran, managing director of Korky's shoe shops, is pretty blunt when asked if there were any signs of a pick- up in the retail sector: "Not at all. The recession is not going to go away in the near future. It's tough out there."

The company's sales have fallen by about 20 per cent over the last year, according to Corcoran. "Sales of men's shoes are suffering much more than ladies -- that's a common thing in a recession," said Corcoran, who is no stranger to economic downturns.

"We traded through the Eighties. In recessions, people don't spend outside seasons. But people do spend over Christmas."

Korky's typically makes about a quarter of its annual trade over the Christmas season, adds Corcoran. However, he feels that the first few months of the New Year will be the acid test for retailers.

"There will be a big freeze on spending in the New Year because of the Budget," he said. "If a retailer feels it will not make money between January and March, it may cut its losses and make an exit. A lot of people don't expect to be here this time next year."

Debenhams

down 3.6 per cent

Sales at the British retail chain, which does not break down its results for Ireland, fell by 3.6 per cent for the year ending August 29, 2009.

Despite this, the group's profit before tax jumped almost 14 per cent.

Unicare Pharmacy

Perfume/cosmetics down 5 per cent

Cormac Tobin, managing director of Unicare Pharmacy, certainly isn't full of Christmas cheer. "It's going to be the worst Christmas we've ever had," says Tobin.

"We have had a very challenging year. We've cut back the amount of stock purchased by about 25 per cent over the last year. We believe demand will fall back by about that level. The Budget is late this year -- and as people don't know what to expect, it will be hard to stimulate sales."

He said that while sales were "tight", the company had "not had as difficult a year as some people". "Prescription sales are doing OK, but sales of premium cosmetics, fragrances and beauty products are down year-on-year."

To encourage people to shop, Unicare has cut its prices by about 20 per cent.

"People have money but they're reluctant to spend it," says Tobin. "This decline in retail sales is not over."

GameStop

down 6-11 per cent

The US video game retail chain GameStop, which sells Sony PlayStation, Microsoft Xbox and Nintendo Wii, said it expected global sales to be down as much as 11 per cent. Despite this, Michael Finucane, commercial director with the Irish arm of the chain, is upbeat.

"People are still buying games -- but they've cut back slightly," says Finucane. "Big game titles are becoming bigger but small titles don't do as well. We have a department where you can trade in old models for new ones, and that department is more popular than ever before.

"Trade always gets tougher the longer you are in a sector as consumer demands change. We're looking forward to a strong Christmas -- we've just launched Modern Warfare 2 and we've a number of high-profile products coming out in the first quarter of the year. Obviously what happens in the economy will have an impact, and we know it will be difficult next year."

Turnover at GameStop's Irish arm increased by 5.5 per cent to €81.3m for the year ending January 31, 2009, according to accounts just filed. However, its operating profits for the same period dipped by 12 per cent.

Harvey Nichols

down 9 per cent

It's been a "challenging year" for Harvey Nichols, according to Kenny Robertson, director of the store, which has been in the Dundrum Town Centre for about four years.

"Our sales are down by less than 10 per cent over the last year," explains Robertson. "Four years ago was boom time and you got double-digit sales growth year on year. Today, it's an achievement to make last year's sales figures."

To weather the recession, the store has introduced more affordable brands. "Last year, one of our more expensive dresses could have cost around €2,500," says Robertson. "This year, the highest price on the floor will be about €1,100. Sales of womenswear are down. The spend has definitely changed towards perfumes and accessories as these are more accessible pricewise.

"The Christmas season will hopefully be good for us -- but from January, there will be a whole new set of challenges."

Woodies DIY

Turnover down by

19 per cent

The collapse of the Irish property market continues to take its toll on DIY sales. Turnover at Woodies DIY and Atlantic Homecare fell by 19 per cent in the first 10 months of this year, according to results just published by the Grafton Group.

Weir & Sons

No pick-up in sales

In 2007, Weir's sold a Patek Philippe Celestial watch for €150,000 -- but with the recession digging its teeth into Irish consumers since, sales like that are no doubt few and far between today.

Jewellery shops have seen sales dip by 17 per cent between the start of last July and the end of September, according to Retail Excellence Ireland.

Chris Andrews, marketing director with Weir & Sons, says it's been "a tough year". "Sales are level but people are becoming more conservative in what they are buying," he says. "More people are going for yellow gold (as opposed to white and other types of gold) than in the past."

The jeweller has been in existence for 140 years, and has seen its share of recessions. "The severity of the drop is what has struck me most about this recession," says Andrews. "The Eighties were very tough, but the drop was over a longer period and wasn't as sharp as this one. We usually make about three months' sales in December -- we're hoping it will be a good Christmas."

PC World & Currys

No pick-up in market

DSG Retail Ireland, which includes electronics retailers PC World and Currys, will release financial results this month. Declan Ronayne, managing director of DSG admits it has been a tough year.

"There is no indication that the market is experiencing a pick-up," he says. "Retailers in the Republic have spent the last year cutting costs to the bone. We've closed two stores and we've closed warehouses. The big concern we have is the migration of business to the North. You have to go out and grab some of this business, regardless of cost."

To try to recapture the business lost to Currys in the North, the company is price matching about 200 Currys' products in the North and Republic. The price-matching promotion runs until December 9.

"Last Christmas, about 80 per cent of the televisions bought in Currys, Newry, were bought by people with addresses in the South of Ireland," says Ronayne. "At the time, retailers in the South were whacked by the sudden devaluation of sterling.

"I've no idea how Christmas will go for us this year. Retailers are nervous about the Budget and consumer confidence. We are aware that people are saving, and praying that people will allow themselves to spend."