LONG AND WINDING ROAD AHEAD FOR RETAIL RECOVERY
25 March 2014The retail sector, once one of the darlings of the local economy, is viewed dismissively as drowning under the weight of internet sales, declining consumer sentiment and the burden of rates. While all of these factors are undoubtedly having an adverse impact on the sector, the reality is that although bruised and battered by the turbulent economic conditions of the past six years, it continues to fight back and there are signs of light eventually emerging at the end of the tunnel. Economic conditions are improving and with that will, hopefully, come a rise in consumer confidence and expenditure. While progress will be slow, we are beginning to witness some increase in demand and letting activity within Belfast’s retail core, which should ripple out into our local towns as the recovery gathers momentum.
The level of rates burden on the retail sector is completely unrealistic and appears to be discouraging retailers from entering the Northern Irish market. And it is unlikely that the revaluation process timetabled for 2015 will provide little in the way of relief for beleaguered landlords and retailers, however surely some form of rates rebate for town centre traders could be introduced even as an interim measure?
Regardless of the challenges ahead, the inherent nature of retailing suggests that it will continue to fight on although it will take time for town and shopping centres to fill current vacancies. On a more positive note, opportunities exist for local retailers who are willing to assume the risk of expanding or re-locating, particularly since many of the major multiples appear to be unwilling or unable to commit to the Northern Irish marketplace. There are signs that this is happening already with local retailer, Argento, the jewellery chain, set to open additional new stores in Northern Ireland and other indigenous retailers such as DV8 rolling out new stores while Subway continues to expand province-wide through its franchisee programme.
Ultimately, the road to retail recovery will be long and torturously slow with no “quick fixes”. It will, however, come and those retailers who are in a position to capitalise on the available retail space stand to reap the rewards. The rates issue will not be resolved easily, but needs to be addressed by our politicians and leaders without further delay if they are indeed serious about supporting the retail sector’s recovery.