Sale season begins early as retailers hope for a fruitful Christmas
SHOPS are filling up with sales signs as retailers anxiously await the outcome of this year's festive season.
But will it be another year of contraction? December retail sales have fallen for four of the past six years, with fashion and homeware sales hit particularly hard.
"Fashion retailers are facing hyper competition, a downward pressure on prices and a genuine lack of occasion -- people go out less now, so have less reason to dress up," said David Fitzsimons, chief executive of industry body Retail Excellence Ireland.
"When it comes to homewares, people are just less interested in doing up their homes than they used to be.
"We're really hoping that the home renovation tax incentive brought in by the latest Budget will help in the new year."
Retail Excellence Ireland estimates that Irish people's core Christmas spend (on food and gifts, excluding extras like dining out and travelling) will be worth about €1.5bn this year.
"The value of Christmas to retailers cannot be underestimated," says Fitzsimons. "For some retailers, the six weeks running up to Christmas will generate half their annual sales."
So some nervousness is natural. One indication of this is the 'sale' signs that have popped up in shops and department stores around the country, weeks before the traditional start of the post-Christmas sales period.
"It's a natural response to increased competition," said Stephen Lynam, director of IBEC group Retail Ireland. "A lot of shops are now in constant sales mode, all year round."
But things are looking up. The largest proportion of retailers surveyed in Retail Excellence Ireland's latest Christmas trading expectations study said they expected growth this year rather than contraction.
"Most retailers are optimistic," said Mr Lynam. "The conditions for growth are there. There are 60,000 more people employed than there were last Christmas, consumer confidence is near a five-year high, the Budget was relatively consumer-friendly and the weather has been fairly good."
But Irish retailers are competing in a very changeable market, where for some products the online seller is king. Some estimates suggest that 75pc of Irish online spending goes to foreign retailers. "That is not sustainable, but as more Irish-based retailers begin to trade online, their share of the online spend will grow," Lynam commented.
The timing of Christmas Day also plays a determining role when it comes to spending. This year Christmas falls on a Wednesday, with the result that many employers are closing up on the Friday beforehand, rather than asking staff to work on the 23rd or Christmas Eve.
This gives consumers more time to shop, but conversely it also delays shopping. People put off doing their Christmas shop, relying on that two-day window -- a cause of concern for retailers who are waiting with piles of stock for the much-hoped-for burst of custom.