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The looming retail crisis


Cassandra Syndrome

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Aug 23, 2009
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ang

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May 4, 2009
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Retail is already the second highest hit sector for unemployment. It has been made clear that Retail is next to construction, though the numbers are way behind construction. Come Jan/Feb the numbers will get a lot closer.
 

hammer

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This will be a common thread for the next 3 years.

If people dont have disposable income they cannot spend !!!!

There wont be any wad of money coming from anywhere in the forseeable future :(
 

Marcos the black

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Hotels too... Many hotels are living on credit extended to them by suppliers, but suppliers are now coming knocking on their doors (Hey, where's that ten grand you owe us for milk?) and the banks are no longer prepared to prop them up. Come Jan watch hotel after hotel shut up shop....
 

hammer

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For the consumer the future Hotel model will be circa €20 per room per night. The bar will sell pints for about €3.50 and the restaurant will provide 3 course meals for about €20.It will be a long road with small margin and the bank debt will need to be extended to 100 year mortgages etc.
 

Cato

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There is going to be carnage in the retail sector at the start of the new year. Many retailers are hoping that Xmas will save the year, but it's not going to. Sales in stores are down year-on-year. People are simply holding on to any money they have. The budget will only make this worse.
 

HarshBuzz

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Hotels too... Many hotels are living on credit extended to them by suppliers, but suppliers are now coming knocking on their doors (Hey, where's that ten grand you owe us for milk?) and the banks are no longer prepared to prop them up. Come Jan watch hotel after hotel shut up shop....
good, we have a ludicrous oversupply of hotels

most of the new hotels are only staying open to avail of the ridiculous tax breaks which Cowen brought in
 

hammer

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There is going to be carnage in the retail sector at the start of the new year. Many retailers are hoping that Xmas will save the year, but it's not going to. Sales in stores are down year-on-year. People are simply holding on to any money they have. The budget will only make this worse.
Same thing happened last year. Have a look at live register February 2009. :mad:
 

Cato

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Same thing happened last year. Have a look at live register February 2009. :mad:
...and the same thing is about to happen again.

I agree on the above comments about hotels too, Carnage!
 

Schuhart

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Retail is already the second highest hit sector for unemployment. It has been made clear that Retail is next to construction, though the numbers are way behind construction. Come Jan/Feb the numbers will get a lot closer.
Grand, these are two sectors that we just don't need at the moment. The fall-off in construction, admittedly, does have knock-on consequencies for Irish based suppliers - but that has already happened at this stage.

Retailers are generally selling stuff made elsewhere. So if they shut up shop, it just reflects that our imports should be reducing, which is quite positive in the circumstances.

So a collapse of retail is really, really not something we should worry about. Any more than we should be worried about falling car sales.

I suppose there's no hope those unemployed retail staff could get together with some unemployed builders and figure out something they can make and sell abroad. Seeing as how builders make stuff, and retailers sell stuff. Just a thought.
good, we have a ludicrous oversupply of hotels

most of the new hotels are only staying open to avail of the ridiculous tax breaks which Cowen brought in
Absolutely, and if the hotel sector drops its prices it might reach a level when they can attract in some business from abroad - which is what will actually get us out of this problem.
 

Malbekh

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My wife supplies directly into the retail trade. At this point the phones should be hopping with orders and enquiries. There is nothing. Her business is down about 85% from last year. If things don't pick up in the next 6 weeks there won't be any Christmas in this household bar the kids.

The first three months in 2010 are going to be horrid.

In the meantime, I don't think I look forward to carnage in the hotel industry, all the artificial developments to avail of tax breaks are going to survive because the banks won't pull the plug on them, so it'll be the family run hotels that have been around for decades that will go out of business.

How many out of town 4* country club hotels with spas and golf courses do we need in this country?

Are you afraid? Not nearly afraid enough. etc
 

Cassandra Syndrome

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Grand, these are two sectors that we just don't need at the moment. The fall-off in construction, admittedly, does have knock-on consequencies for Irish based suppliers - but that has already happened at this stage.

Retailers are generally selling stuff made elsewhere. So if they shut up shop, it just reflects that our imports should be reducing, which is quite positive in the circumstances.

So a collapse of retail is really, really not something we should worry about. Any more than we should be worried about falling car sales.

I suppose there's no hope those unemployed retail staff could get together with some unemployed builders and figure out something they can make and sell abroad. Seeing as how builders make stuff, and retailers sell stuff. Just a thought.Absolutely, and if the hotel sector drops its prices it might reach a level when they can attract in some business from abroad - which is what will actually get us out of this problem.
No construction, no retailing, no cars, no leisure industry. That just about leaves the public service, whose wages are paid by......
 

HarshBuzz

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There is going to be carnage in the retail sector at the start of the new year. Many retailers are hoping that Xmas will save the year, but it's not going to. Sales in stores are down year-on-year. People are simply holding on to any money they have. The budget will only make this worse.
in some cases this is a good thing; allow me to present my argument.

bear in mind that this is actually part of a necessary trend (don't get me wrong; it is very sad watching businesses go bust and people lose their jobs) but there is a huge cohort of 'businesses' in this country that prospered in the bubble years and now, quite simply, have no place in the economy as it now stands. A lot of these 'businesses' are the people who are whinging loudest about the unavailability of credit - and, ironically, they are the very enterprises that should be denied it as their business model is now completely unsustainble.

I'm talking about 5 star hotels (with the obligatory spa facility) in locations that simply don't justify having anything more than a B&B, high-end fashion\jewellry retailers whose customer base are now bust, high-end home furnishing stores, many car retailers, many restaurants, beauty salons etc etc - in an economy plagued by rising unemployment, deflation, high levels of debt, falling incomes, rising emigration and zombie banks - these enterprises simply have no place, apart from maybe as some kind of garish monument to the madness that was the years of the Bubble.

The scarce credit that does exist in the conomy should be directed away from these failed and failing enterprises and directed towards new businesses that are innovative and export-led. Cutting-edge biotechnology (where we have a large footprint already), software, alternative energy, next-generation IT; this is where we must be directing our efforts to create jobs and sustainable, Irish-owned exporting businesses.

We need to have the optimism and vision to look beyond our failed train wreck of an economy and work towards Ireland v 2.0 where:

  1. failed banks are allowed to fail (NAMA is a joke and the coming mortgage default tsunami will require another NAMA anyway)
  2. property can never again become a national obsession (remove all property-related tax breaks and actively discourage property speculation with the objective of keeping house prices low)
  3. we build a cost-effective, modern public service
  4. all of our commercial energies are devoted to building world-class innovative, exporting industries with accompanying educational centres of excellence
  5. we dismantle completely the political system that brought us to this sorry pass and rebuild from the ground up - I see no irish politican with the balls or vision to achieve this (although Enda in his usual incoherent way is at least trying to make something approaching the right noises)
 

TradCat

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Prices are still too high in the clothes shops. Hoping for a good Christmas while keeping celtic tiger margins is not going to work. A lot of people have money to spend but they won't do business at rip-off prices anymore. The retail sector need to start astonishing reluctant shoppers with value.
 

HarshBuzz

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Prices are still too high in the clothes shops. Hoping for a good Christmas while keeping celtic tiger margins is not going to work. A lot of people have money to spend but they won't do business at rip-off prices anymore. The retail sector need to start astonishing reluctant shoppers with value.
they are doing this already

(in Belfast, Banbridge and Newry)
 

Digout

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Oct 2, 2008
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The massive rents are destroying the shops, especially those in retails parks. Expect to see retail parks closing in Jan. Many shop owners are hanging on, so they can get the cash in their hands. They wont be paying tax either, as they will use this money to feed their families, a lot of people will be skipping the country in Jan.

The scale of the retail bloodbath is not understood, there is going to be a complete meltdown.
 

Schuhart

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No construction, no retailing, no cars, no leisure industry. That just about leaves the public service, whose wages are paid by......
The foreign-owned multinational sector, ultimately, there is no particular difference between the public service and the useless businesses you list above. HarshBuzz's post set its out in a very solid way.

An alternative way of seeing it is we're like the Golgafrinchams. A nation of telephone sanitisers and hairdressers, suddenly trying to be really useful. And many of us aren't quite getting it yet.
 

HarshBuzz

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The massive rents are destroying the shops, especially those in retails parks. Expect to see retail parks closing in Jan. Many shop owners are hanging on, so they can get the cash in their hands. They wont be paying tax either, as they will use this money to feed their families, a lot of people will be skipping the country in Jan.

The scale of the retail bloodbath is not understood, there is going to be a complete meltdown.
you're right Digout and Kerrynorth of this parish has also accurately forecast what's going to happen

and you have revolutionary instincts ;) so you probably comprehend me when I say that in order to save this particular village, we must first destroy it....
 

kerrynorth

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Oct 5, 2005
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For the consumer the future Hotel model will be circa €20 per room per night. The bar will sell pints for about €3.50 and the restaurant will provide 3 course meals for about €20.It will be a long road with small margin and the bank debt will need to be extended to 100 year mortgages etc.
I was looking up Dublin hotels the week before last for last Wednesday night. In the end I could not make it up but as an exercise in looking at what was available it was interesting. City Centre 3* could be got for €40-55 room only. Northside guesthouses (Lower Gardiner St, poorish quality I know) were €30 and €35 and one was even €28! The room only rates for 2 people 3* would be approaching per person hostel type rates! Really cheap. I booked an airport hotel for Friday night week as I am getting an earlyish flight for a football match on the Saturday morning and I got that for €57 for a hotel that has a really good rating from reviewers on tripadvisor.
 

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