Upmarket jeans retailer Guess: closed its South Anne Street shop in Dublin city centre earlier this year

An unexpected surge in retail sales after the budget has put a gloss on what was otherwise a truly horrendous year for most retailers. Many will find themselves unable to pay their rent and landlords and banks have been stepping up the number of legal actions against those without the working capital to pay their rent or other bills.

A glance at the court lists shows that even the best- known retailers in the country are being sued in relation to rent disputes while others have put the breaks on expansion and are doing everything possible to avoid having to open new shops because of the fit-out costs involved.

At home, the Sasha group closed and there were a number of other casualties while some domestic retailers had to seek protection from their creditors. Others with Irish operations which closed down included Land of Leather and music and DVD retailer Zaavi while the upmarket jeans retailer Guess also shut its doors at its South Anne Street shop in Dublin city centre.

The flight of shoppers to the North continued but there were other factors at play such as rising unemployment, the perception of price gouging and a need to save for the rainy day that had already arrived – something Irish consumers had spectacularly failed to do judging by the personal credit growth during the bubble.

Increasing taxes have also given the man or woman on the high street less money in their pocket for impulse purchases and this has led to the rise of the 'shopping- list' customer who sticks rigidly to their pre-selected items.

For those who make it through the year battered but relatively unscathed, there will be opportunities for expansion with significantly fewer upfront costs as rents drop and landlords chip in on the cost of fitting out a store. The last thing a landlord wants is to be left with an empty shop and responsibility for some or all of the rates due. The abolition of upward-only rent reviews means tenants with the funds and appetite to expand will have more certainty on future costs.

The retailers are also able to cushion themselves against future downturns with the increasing acceptance of turnover-related rents, meaning that when they suffer their landlord has to take a hit as well.

In the grocery sector, a price war initiated by Tesco in response to the numbers travelling North has had knock-on effects across the sector and led to significantly reduced grocery bills for consumers.

Aldi and Lidl cut prices in response and across the board retailers became more competitive, sourcing goods from overseas suppliers if necessary.

As a result the value of food, beverage and tobacco sales in Ireland fell at a 50% higher rate than the volume of sales, according to CSO data, while the sales of cheaper supermarket own-brand goods rose sharply.

On the fashion side of the business, the collapse of Baugur – done in by the Icelandic bank crisis – was the story of the year in Ireland and Britain but in the end had significantly less impact than was initially feared, although fashion chain Principles did close.

The group was the second biggest player on the high street and also owned or had stakes in House of Fraser, Hamleys, Whistles, Karen Millen, Warehouse, Jane Norman, Oasis and All Saints.

Whether we will see another spectacular international retailer collapse like that is open to question but it's a near certainty that at least two well-known domestic players will go to the wall next year.

Finance minister Brian Lenihan may think the worst is over but for many in the retail sector, it's already too late.

When consumers are watching their penneys, every Lidl discount helps

There are some retailers that have done well out of the recession. And 2009 will go down as the year that the German discounters Aldi and Lidl became mainstream, as straitened financial circumstances encouraged more consumers to shop around. The two brands also signaled that they would like to enter the convenience-store market which would be a significant shake-up in that sector.

In addition, a domestic discount player was set up by the Barry Group in the form of Buy Lo, which plans to eventually have up to 40 units. Tesco led a grocery price war in response to the discounters and the numbers heading North and has seen its market share increase as a result.

Discount and past-season retailer TK Maxx continues to trade strongly and is looking for space in Dublin city centre while a similar store group is understood to be looking to open in Ireland.

Penneys confirmed a number of other store revamps and expansions. It has also continued to expand internationally with new shops opening in Spain, Germany, Portugal and Belgium under the Primark brand – the group now employs nearly 28,000 people.

The trade levels being achieved by its Oxford Street flagship store in London are described as staggering by retail experts. Anecdotal evidence suggests that it is turning over an average of £1.5m (€1.68m) a week at the store and Drapers reported that on 6 December alone the shop turned over £700,000, up 17% on the same day last year.

Other fashion retailers looking to expand in Ireland include Gap, Superdry and Cult while Tous, Cos, Tally Weijl, Apple, Diesel and Hollister are all looking for their first stores in the Republic. British department store John Lewis meanwhile said earlier this year that it was looking to open its new smaller-format stores in Ireland.

It had previously agreed to open a store in the proposed Dublin Central retail scheme on O'Connell Street in Dublin.