Retail environment in Northern border regions defies credit crunch
Another casualty of the credit crunch today, as Zavvi went into administration. Insolvency expert, Begbies Traynor, recently suggested that up to 15 national retail chains are predicted to go bust before the middle of January, forcing thousands more shopworkers onto the dole. So Zavvi is the first on Christmas Eve and many other major retail chains face uncertainty in 2009.
A look at Northern border regions such as Derry and Newry suggests that these regions are largely cushioned from the worst effects of the credit crunch. So are these regions bucking the trend?
A look at the trading conditions in Derry in the run up to Christmas suggests trade has been exceptionally high this festive period. Attributed to Sterling’s value against the Euro, the 2% VAT reduction, and exceptional pre-Christmas sales have proved irresistible for many price conscious consumers. Lucky shoppers are set to benefit even further with massive Christmas sales offering unprecedented discounts of up to 70% off.
Footfall in Derry city centre increased by 4% on the same period last year according to the City Centre Initiative as shoppers flocked from border regions to take advantage of the bargains. A recent price comparison report which compared twenty gifts, fashion and food items in Derry and the border regions revealed an incredible saving of £396.24. For example the Nintendo Wii in Derry is priced at £179.99 compared to €279.99 across the border, resulting in a massive saving of £60.34. In the run up to Christmas a two day €1 for £1 promotion further boosted commerce, with many retailers taking the decision to continue the scheme as it proved so effective. As a further carrot for shoppers, many big name retailers including M&S and Debenhams slashed prices in a bid to curb the negative effects of the credit crunch with discount days. Independent retailers followed suit, making shopping in Northern border areas even more attractive for shoppers across the region.
Fergal Rafferty, Centre Manager of Richmond Shopping Centre highlights their observations. He explains:
“I would estimate that 30-40% extra revenue has been generated over the festive period, with many shops offering much more favourable euro rates than banks. This has been the nature of border retailing for years, with either side receiving the benefits of currency fluctuations. In these difficult economic times globally, traders in Richmond are delighted that the economic advantage is currently in the North. Shoppers can expect to see excellent value throughout January with many shops offering huge discounts in order to remain competitive and maintain market share and I would expect this trend to continue well into 2009.”
Independent retailer, Chocolate, of Foyle Street, Derry, say that this winter period has certainly not been bleak for them. Proprietor, David Conaghan comments:
“Although the credit crunch has certainly had an effect on traders, this Christmas has been an overall success in figures. With the current VAT and Euro rates, we have seen a huge number of customers travel from Donegal and other border counties to shop in Derry. It is great for independent retailers like ourselves. With our 50% sale starting on 27 September we expect that this will be ongoing in the New Year.”
As further evidence Foyleside Shopping Centre reported their biggest day of trading ever this Monday 22nd December, with 20,000 additional shoppers visiting the city centre. Time will tell if Begbies Traynor’s predictions are correct, but the statistics certainly suggest that Northern border regions have been cushioned from the worst of it this Christmas.
Tags: Credit Crunch, Retail
December 26th, 2008 at 5:13 am
“Insolvency expert, Begbies Traynor, recently suggested that up to 15 national retail chains are predicted to go bust before the middle of January, forcing thousands more shopworkers onto the dole.”
This quote has been squewed beyond belief since it was published in the Sunday Times a week ago. There’s nothing to say that the 15 national brands will get purchased by someone else thus reducing the umemployment burden.
I can understand why retailers like Chocolate are seeing gains, fashion will usually rise on the run up to Christmas as folk are buying outfits for parties etc. Independants can monitor cashflow to a finer degree than the larger retailers. Small is the new big.
The general Northern Ireland cushion may not make much difference in terms of the big name retailers all it will do is balance out the numbers of the loss generating stores. At this time no one is really safe.
January 19th, 2009 at 11:32 am
I think you are thinking like sukrat, but I think you should cover the other side of the topic in the post too…
March 25th, 2009 at 4:41 pm
You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.\par
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April 15th, 2009 at 4:17 am
I noticed that this is not the first time you mention the topic. Why have you chosen it again?
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I was searching for something like this the other day.
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