Still spending, but not so fast

Among Christmas shoppers, the talk is of ‘caution’ and ‘holding off for the sales’. But the death of Irish retailing has been exaggerated if we’re to believe Dublin’s biggest department stores, which are ticking along nicely with sales of €4,000 bags, Louboutin shoes and iPads

THIS YEAR, for the lucky ones with cash, the watchword is discretion. The jolly, girly New York shopping flights have died, killed by New York prices and the new culture of austerity. Some have diverted to Chicago, Orlando or Boston, but you won’t hear them boasting about it.

The notion of the one-day transatlantic shopping trip – depart 10.30am, shop for a frenzied seven hours, return at 7.30am, 23 hours later – is now heresy. Or is it? The trick is not to be seen spending it, says Jacky Byrne, a retail consultant. It’s less about sparkle, more about vouchers. And there’s no panic, says Byrne.

Sara Mullen emerges from Marks Spencer lugging an enormous brown box. “We’re going for practical. Totally,” she says earnestly. “For example, the four of us usually club together for something for Mum and Dad: a few years ago, we got them a week-long trip to Rome. This year it’s a good mattress topper.”

Right on cue, her sister appears, swinging three Jo Malone bags, containing about €300 worth of exquisitely wrapped, utterly impractical perfume and scented candles inside.

Wouldn’t Rome have been cheaper on the whole? “Hmmm. I know. You set out full of holiness and notions about some really good sheets and home-made chutney . . .” says the sister with a nervous laugh. “But that’s me done now.”

She, of course, is the retailers’ dream: the one who sets out to get a jacket for her 16-year-old daughter and ends up with a pair of Swarovski crystal headphones. According to Brown Thomas, the €100 Deos headphones are their bestseller by a mile, followed by Lanvin notebooks and pens, Tiffany bangles in rose and red gold, Mulberry “Alexa” bags, J Brand Agnes jeans, something – anything – from Stella McCartney, scarves by the dear departed Alexander McQueen, the Nazareth candle by Cire Trudon, Moncler ski jackets, Black Orchid fragrance from Tom Ford and anything at all in a be-ribboned Jo Malone box.

At around 6pm on Wednesday, nine days before Christmas, Brown Thomas is ticking over nicely; not a lot happening in the women’s clothes departments – the Ladies Who Shop are dressed for Christmas by now anyway, one imagines – but the Mac make-up counters are conspicuously heaving, there’s an angsty swarm around the Jo Malone outlet, a steady throughflow in Tiffany’s, some grave perusing of scarves in Louis Vuitton, a thorough scrutinising of handbags in accessories, heavy movement in the vast cosmetics area, five nail technicians working flat out at Nails Inc and a rolling, 12-strong queue at the Nespresso (coffee machines advertised by George Clooney) tills upstairs.

The store is fresh out of the “unique” Hermes bag (specially designed for the Marvel Room), says Stephen Sealy, managing director of Brown Thomas. That’s about eight bags at €4,000 a pop. They can’t keep enough Louboutin shoes in stock – “the Irish customer has an enormous appetite for the lovely Louboutins” – so those towering, red-soled, €395-plus objects of desire are soon to get their own little boutique downstairs. And the children’s clothes are moving back from BT2 to the main store, complete with various types of bespoke parquet flooring to designate different areas. The way forward for BT, says Sealy, is to strive for the difference between “grand” (the Irish version of “it’s fine”) and “wow!”.

Is he making this up?

“No, no. The Irish consumer doesn’t have an appetite for the hairshirt. At some point, the ‘oh sod it’ mentality kicks in,” he says, stroking a nice piece of bespoke parquet. “There is a greater element of planning” at play this Christmas, he says, so his job, frankly, is to “tempt people”.

Thus, the €100 glittery headphones. “The death of Irish retailing has been greatly exaggerated. You can sit and moan or you can do things,” he says, mentioning that they’ve run 300 “temptation events” in stores this year.

The heaving counter in Arnotts on Henry Street is Pandora jewellery’s, simple chunky bracelets and clever, non-dangly charms that have spawned a dozen imitators. Sales of desirable Apple products – such as the iPad, selling for €500 to €700 – are booming, the Bobbi Brown cosmetics counter has a queue and an Arnotts’ own-brand man’s sweater at about €60 euro is flying out the door.

Nigel Blow, the managing director of Arnotts, hasn’t noticed any “huge change in shopping habits” this year. “It’s not that people aren’t spending; they’re just being more considered, more deliberate about it. The key thing they want is value but that doesn’t necessarily mean cheap.

“I can tell you for sure that business is not reflecting everything we’ve been reading and hearing about. People are spending. Henry Street is performing really well. You’ll see no empty or unoccupied stores. Fatface and Forever 21 [a young fashion label] have just moved in and they’ve been phenomenal. They’ve genuinely brought people into Henry Street.”

Retailers have to be positive. It’s how they drag themselves out of bed on snowy mornings when sales are tanking by 40 per cent – as many quietly admit was the reality during the recent two-week Snowmageddon. Arnotts was down 35 per cent. Brown Thomas 30 per cent, according to Sealy, and 25 per cent on average across all the stores. “When you lose business in that way, you never get it all back,” says Sealy. “What happens is, you’re stuck at home and you start looking at flight prices for about a fiver, though of course it’s going to cost several hundred by the time you’ve finished . . . but suddenly you’re off to the Canaries with the money that would have gone on a lovely Prada bag.”

The unpredictability of the consumer is exemplified by the mother of three student boys, who solemnly announces the family of five is saving this year by “doing Kris Kindle and finding out what each person really really wants”. The idea is that each family member will have €150 to spend on one other – “financed by us, anyway”, she says ruefully, before adding that they’re all off to spend four days over Christmas in a lovely country-house hotel.

Nigel Blow puts the past few years in perspective: “It all started going off the rails in the second half of 2008 and everyone was down by about 8/9/10 per cent. In 2009, it went down another 20 per cent – some say they went down by 40-50 per cent between 2007 and 2009. For 2010, provided it doesn’t snow again, I’d predict an increase for the year in high single digits. It won’t be 10 per cent.”

“The announcement that retailers are reopening on Stephen’s Day is only an indication that this and the icy weather had a real effect on the market,” says Finian Murphy of Mindshare, specialists in media and digital planning and consumer research. Arnotts, Brown Thomas, Clerys, Penneys and Debenhams are all among those with plans to reopen the day after Christmas.

So for all the talk of €50 scented candles, people have cut back substantially. A convenience store owner in a large border town says while the consensus is that there has been “a slight improvement this year, people are very afraid. I think they do have the money but they’re either holding onto it or paying off loans.” A fashion shop proprietor in the town notes that the credit-card mentality is vanishing and people have gone back to paying for an outfit in instalments. “Shopping is no longer seen as a hobby. People aren’t afraid to say they got the outfit in Penneys.” Travel agents note that people are booking almost on the date of departure rather than planning ahead.

There is money out there, still, but it is certainly being withheld. As Sealy says, savings are running at 12 per cent, even though 85 per cent of those with jobs before the recession still have them. On the streets of the capital, the talk is of “caution”, “slower to spend” and “holding off for the sales”.

While Brown Thomas and Arnotts were doing nicely this week, there was no sense of urgency. A big-name hairdresser who would normally be booked out for Christmas week a month in advance still has appointments available. He’s confident the empty spaces will fill up over this weekend but he can’t explain this new pattern. “Last Christmas you got a sense of the one-last-blowout mentality. This one is pretty unreadable. We’ve done a lot of discounting and offers this year. A blow-dry is nearly half the price it was. And still, it all comes down to next week.”

At least for the hairdresser a customer can’t go online for highlights. But for most retailers, the competition is building furiously. According to Visa Europe, consumers are set to spend a total of €356 million online on gifts in the run up to Christmas. It estimated that more than 94 per cent planned to buy some gifts online, with an average spend of €172 each. Men are likely to spend more (€192) online than women (€162), and Irish online shoppers reckon they can save an average of 18 per cent on Christmas gifts this way.

The top searches in Ireland on Google in the past month have been eBay, Argos, Boots, donedeal, shoes, River Island , Debenhams, dresses, Next and Ticketmaster. Hot on their heels were Harvey Norman, Arnotts, Ugg, Amazon, Brown Thomas, Debenhams, HM, Currys and Pandora. Finian Murphy of Mindshare perceives a continuing uncertainty among shoppers about spending, mixed, paradoxically, with a new brand of confidence. This was the year when consumers finally began to compare prices and goods, stopped agitating about switching service providers and downgraded to cheaper or inferior products.

IN RECENT YEARS, the road north was the traditional Christmas route for any journalist investigating consumer patterns. In other years, pictures of enormous tailbacks into Newry and couples wheeling several alcohol-laden trolleys were conspicuous in any coverage. Last Thursday morning, southern cars – mostly from nearby counties – were in the minority in the the Quays shopping-centre car park and Sainsbury’s was an oasis of calm. A local man says baldly that people don’t want to pay for using the car park (now pay-and-display).

Most of the southerners there, like Paula Browne from Drogheda, were on three-week runs to restock on food. She still finds it good value compared to the south but sees little point now in hauling alcohol from Newry when Tesco is offering a 25 per cent discount on six bottles of wine nearer home. But an under-employed painter and decorator from the west admits he drives his van to the north regularly and hauls home thousands of euro worth of alcohol to sell on to shopkeepers in his local town. “You’ll pay €18 for 15 beers in Tesco in the South; but you’ll get 45 beers for €27 in Tesco in the North,” he says. He also does a good trade in cigarettes, frozen food, fresh meat and incidentals such as firelighters.

We drive on to Lisburn to check out the giant Marks Spencer, once another alcohol magnet for southerners. There are about two southern cars in a packed car park. For the South at least, that’s the good news. And VAT is set to rise even further in the north, which should keep more money at home.

All of which serves as a reminder that shopping is a serious business. For all the sniping at its €50 potato peelers, Brown Thomas provides a living for about 2,000 people. Some 1,200 are on the permanent payroll, and another 150 have temporary jobs for Christmas. Across the river, Arnotts employs about 1,000 plus 50 extra for Christmas. They’re all praying that the snow stays away and that people loosen the purse strings.