Retailers slash prices in bid to lure Christmas shoppers
Retailers admitted that they would be going into "January sales" mode early this week.
Many stores are concerned about trading trends for 2012, with some of the bigger international chains threatening they may have to pull out of Ireland next year if the market does not improve, a report on the sector showed. The report was carried out by Retail Excellence Ireland (REI), which represents 8,500 stores.
The prognosis was not good either from a separate report from the Central Statistics Office (CSO) yesterday. It says we are on the brink of slipping back into recession as consumers refuse to spend.
To the surprise of many economists, the economy shrank by 1.9pc in the third quarter as nervous consumers refused to loosen the purse strings. The gloomy performance may have been caused by worries over the eurozone crisis.
Apart from agriculture, most other sectors are struggling, although the export performance was again strong. While the CSO insisted the performance in one quarter should not be "over-analysed", other experts said the international backdrop could dent even the export performance which had been helping Ireland stage a recovery.
Against the backdrop of that sort of sentiment, one of the few reasons shoppers are likely to come out over the next 10 days or so is that prices are likely to go up after January 1 when the 2pc VAT increase kicks in.
But that in itself will not be enough to sustain retailers desperate to garner as much cash as possible over the traditional big-spend period.
"The Christmas rush will commence this Saturday," the REI said in its report.
"Consumer sentiment is at its lowest ebb. There is a perception amongst most consumers that Budget 2012 will have a drastic impact on disposable income."
And it added that, in a bid to kickstart spending, "a number of retailers are considering entering sale mid-next week".
It admitted that consumers were "cautious and price-conscious".
Already some major fashion retailers are offering discounts of up to 60pc on their autumn and winter lines due to a relatively mild autumn.
Ian Galvin, chairman of Aurora Fashions Ireland, said: "Shoppers want value now and the tradition of waiting until December 26 or 27 to start the sales is gone."
His group of fashion brands -- Coast, Oasis, Warehouse and Bastyan -- launched discounts of between 20pc and 70pc earlier this week.
REI predicted a "bloodbath" in the troubled sector. However, some out-of-town retail hubs like the Dundrum Town Centre in Dublin are bucking the trend.
growth forecast down: Business