Saturday 24 February 2018

Jingle all the way: The Return of the big spend

We're all set to splash out €1.6 billion in the next 20 days, making it the merriest Christmas in almost a decade. But can we really afford to shop 'til we drop?

A busy pre-Christmas Grafton Street, Dublin. Photo: Arthur Carron/Collins
A busy pre-Christmas Grafton Street, Dublin. Photo: Arthur Carron/Collins
Mood change: Mum-of-three Andrea Mara believes there has definitely been a loosening of the purse strings. Photo: Peter Houlihan
John Meagher

John Meagher

On Saturdays, the lines of cars can snake right out to the slip roads of the M7. The newly extended carpark at Kildare Village now holds 1,500 vehicles, but such is the demand at weekends that it can take quite a while to get in and get a free space.

Anyone who doubts the renewed consumer confidence in Ireland in the run-up to Christmas 2015 should visit the massive retail outlet on the outskirts of Kildare town. Phase Two opened last month, bringing the total number of shops and restaurants to close to 100 and daily footfall has gone up significantly as well. And while there's some window shopping, people come here to spend money - lots of it, in many cases.

Stores like Mulberry, the luxury leather goods specialist, are popular with those keen to purchase a 'statement' handbag for considerably less than they would have paid for the same item elsewhere last season. But even with hefty reductions, the bags don't come cheap. A "dusty gold bag" that promises to "add a hint of glamour to your outfit", according to the Kildare Village website, is yours for €650. Its original selling price was €1,450.

Andrew Marshall, the Englishman who took over as business director of Kildare Village earlier this year, says business is booming as "guests" - as he likes to call customers - come in their droves for a vast assortment of luxury and high-street brands, many of which have no other presence in Ireland.

When it opened in 2006, the outlet's chief selling point was the big savings offered on last season's fashions. Now, Marshall says, it's all about creating a unique retail experience. "We want our guests to enjoy a shopping experience that's quite different to anywhere else," he says, pointing out that it's a rare retailer that offers a kennelling service for dog-loving shoppers or a facility to collect bags in one location at the end of a busy shopping day.

And while he says it's clear that the purse-strings have been loosened significantly, he finds that bigger purchases are "considered", and not on a whim as might have been the case during the Celtic Tiger years.

Another sign that the recession has been consigned to history for a chunk of the population can be gleaned from the fortunes of the K Club - just up the road from Kildare Village in Straffan. Like many five-star hotels, it experienced a drop-off in revenue when the recession first hit, but now it's buoyant again, especially thanks to the domestic market, which accounts for an estimated 50pc of business. And it's had a facelift, too - to the tune of €20m.

"The austerity years were tough," general manager Michael Davern says, "but we've seen big changes in recent times, especially this year. You can see it in the wedding market - the spend per guest is up, and the wedding parties have up to 20pc more guests than you would have seen during the recession. That's probably an indicator that people feel more secure in their jobs and are willing to take a day off and spend a bit on a wedding."

There are other signs, too, he notes. Champagne sales at the K Club dropped off after 2008, but they've come back again in a big way. "And when people are having wine with their dinner," he says, "they're often choosing bottles from a more expensive band than they would have done even a year or two ago."

Another five-star establishment, Powerscourt Hotel in Enniskerry, Co Wicklow, has seen a sharp upturn in business, too.

"Spa breaks are becoming popular again," managing director David Webster says. "People are working hard and they don't feel guilty about treating themselves now, but they are not spending willy-nilly like before. It's much more considered spending - they're thinking long and hard - and while money is still important, the experience is, too. We're all time poor, so when we take a break we want it to be good."

Webster believes there is less of the ostentatious spending of the boom years, but there are signs of if-you've-got-it-flaunt-it when one considers the upsurge in sales of luxury cars. There is a strong demand for such premium models as the Range Rover Vogue - starting price €140,000 - and Volvo's latest iteration of its SUV, the XC90, has been performing well since its glitzy Dublin launch this summer. Throw in the executive trimmings, and it will set you back €80,000.

Land Rover - Range Rover's parent company - has seen a large spike in sales this year versus 2013, and the company splashed out an estimated €450,000 to sponsor TV3's Rugby World Cup coverage.

Overall, new-car sales have been at their highest since 2007 and next year is expected to be just as buoyant, with at least 160,000 161 and 162 cars projected to be sold.

Former Arnotts MD Eddie Shanahan - now a fashion-retail consultant - says renewed consumer confidence has been apparent for a couple of years, in Dublin especially, but there's a real sense that 2015 has been a turning point.

"The economy recovery is reflected in that confidence," he says, "and it's good to see people more comfortable with spending again."

He says there was a race-to-the-bottom mentality when it came to price during the recession and while that's obviously a harmful practice for retailers, he says consumers got "discount fatigue", too.

"I don't think the so-called 'Black Friday' appealed to consumers in the way some retailers might have thought," he says of last weekend's sales bonanza. "People look at value now, not just the price. Quality is important and so is the retail experience. It's no surprise that online retailers such as Amazon are starting to open bricks-and-mortar stores. You can't smell a perfume online, or feel the texture of pure cashmere."

And yet, venerable stores like Brown Thomas and Arnotts have invested heavily in their online service and are reporting a highly enthused response from shoppers to their 'click and collect' offerings.

As the marquee store on the prestigious Grafton Street, Brown Thomas's fortunes are often held up as a window to the wider economy. Judging from the throngs of people shopping there on Wednesday, it seems to be in especially ruddy health. Some 500 seasonal workers have been recruited this year to cope with the extra service demand. That's up 100 on last year.

"Business has been strong this year," says Stephen Sealey, Brown Thomas MD. "We have seen a very positive response from both international visitors and our domestic Irish market to the investments we have made in our stores, in particular to our new beauty and accessories halls in Dublin." The retailer spent €9m refreshing the ground floor in Dublin alone.

"Just this week," Sealey adds, "a larger Hermès boutique re-opened on the ground floor which followed the refurbishment and enlargement of the Louis Vuitton and Chanel boutiques earlier this year. In Limerick we have opened a new Cos department and completed the refurbishment of the Cosmetics Hall. Indications so far are looking good for strong trading in the run-up to Christmas".

Mother-of-three Andrea Mara, who runs the award-winning parenting blog Office Mum, says one need only walk down Grafton Street this year to see the change in mood. "You just feel that people are a bit more confident and will spend that bit more than before. It's the little things, like my siblings and I agreeing to spend that bit more on Kris Kindle compared to other years, or my husband and I not discussing this year what limit we would set on presents for each other." But Mara knows from first-hand experience that old certainties about money and employment are not what they were.

She was made redundant earlier this year when the financial services company she worked for closed its Dublin office. "I'd certainly be careful when it comes to Christmas shopping, or any shopping for that matter," she says. "And the people I'd know wouldn't be going mad with their credit cards either. You hear people say, 'We all lost the run of ourselves during the Celtic Tiger', but that's a bugbear of mine because I didn't do that - there was no apartment in Bulgaria for us."

Andrea says she and husband Damien, who works in Dublin's IFSC, carefully monitor their spending, especially now that debit card 'contactless' payments make it so easy to purchase small items almost without thinking of it.

"I remember we got a shock when we saw the bill," she says. "It's almost easier to keep tabs with cash."

It's a prudent approach and one that other consumers in the run up to Christmas may not be heeding.

Michael Culloty of the Money Advice and Budgeting Service (MABS) says it is still too early to tell if many people are once again spending beyond their means, but suspects that old habits may have returned.

"It's often when they really find themselves in difficulty that they come to us," he says, "and as this year, and maybe last year, are the ones where it really feels as though the economy is improving on a general level, it may be some time before we can get the true picture."

What is clear is that the rising tide has certainly not lifted all boats when he thinks of some of the people MABS helps. "There's an awful lot of hardship out there, people literally on the breadline who are barely able to afford to buy food because of their bills. All the talk of spending in the run-up to Christmas must be hard for them, because they're not seeing any of it.

"It's especially tough for those who have children because they might have had to scrimp all year and even now they find that they don't have enough money for presents."

Such a predicament is unlikely to be the experience of those loading up their cars after a visit to Kildare Village which, Andrew Marshall points out, is no further than two-and-a-half hours' drive from anywhere on the island.

Now, he's rolling up his sleeves and looking forward to 20 days of serious trading. Does he expect a particular day to be especially busy? There's no hesitation: "Every day!"

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