'People on Grafton Street are going somewhere else, people on Henry Street are there to shop." It's an oft repeated mantra by retailers in Dublin but the fade in the allure of Grafton Street, the city's premier retail avenue, is symptomatic of the wider malaise that has hit the retail sector. Soaring unemployment, wage cuts and a wider acceptance that the Irish consumer was paying too much for too long have contributed to falling retail sales and a relentless search for bargains.

Walking down Grafton Street these days is telling. There are still plenty of people on the street, but not that many in the shops. The Sunday Tribune recently revealed that 15 leases on the street are either openly or quietly on the market as high rents and falling sales force many retailers out. Some have already shut up shop. It all seems a long way from the halcyon days of two years ago when Grafton Street rents were amongst the highest in the world and retailers were willing to pay up to €1m just to buy a lease so they could open on the street.

"People are not spending money. Ireland has gone from a far higher high to a far lower low than Britain," said one retail expert, pointing out that retailers trading in this country made higher profits per square foot in this country than they did in their stores in Britain. The downturn has changed all that.

"I personally think the warnings were there two years ago and it's like we partied hard and had lots of fun and woke up and said 'Holy shit, what happened?" said Ian Galvin, the chairman of the Irish operations of Warehouse, Oasis, Karen Millen and Coast. "Northern Rock was a bit of a shake-up but when Lehmans happened you started to ask 'what's going on?' I don't think we were prepared but would it have been any better if we had been? We might have panicked more."

Galvin said that the past five years had seen people lose the run of themselves in terms of spending and that for the last two years of the boom people were shopping because they felt it was compulsory. Now, he says that while sales across his brands are down 10-15% (albeit sales on Grafton are much worse and down 30%) some people "are still willing to buy what's new and fresh because they have the disposable income to purchase what they really desire compared to buying things for the sake of it. Retailers are now looking to fund new designers and come up with fresh ideas."

Galvin admitted, however, that he knows of certain retailers, particularly at the top end of the market, who had seen their turnover slump 50%. "This is a new departure, I don't think retailers can compare year on year anymore. They've got to try to improve month by month," he said. Galvin's brands currently have a special reduction each week on some key items such as jeans. "It draws people into the shops and then they might buy something else – a black dress, for example, that's full price but they think it's worth it. Customers are only buying what really turns them on."

Eoin Feeney of commercial property firm HWBC said there's an understandable nervousness in the market because of the number of retailers who've gone bust. "Vacancy is becoming a real issue and provincial centres will be particularly affected."

Karl Stewart, a director of DTZ Sherry FitzGerald, advises a number of retailers including New Look, Tommy Hilfiger, Boots and Argos. He says that until the market stops slowing there will be fewer people doing deals. "The cannibalisation factor" will have to be considered in future, he said. Cannibalisation occurs when sales drop at a retailer's existing store after it opens a new one elsewhere. He also has concerns about the future of some retail parks around the country. Retail parks are the warehouse-style units that were built on the outskirts of towns and cities during the boom. Typically, 'bulky goods' are the only type of shops allowed in them, so they attract the likes of DIY and furniture retailers.

During the housing boom, the number of such parks exploded, but now many are in serious trouble as their tenants go bust. One in the south east is understood to have never attracted a single tenant, making it the retail equivalent of a tumbleweed town.

There is life in the sector still though. Last week, O'Callaghan Properties and the Duke Of Westminster's Grosvenor Estates submitted plans for a €500m development at Liffey Valley that would create 4,000 jobs during construction while developer Joe O'Reilly is planning major expansions of Dundrum Town Centre and The Pavilions in Swords and is trying to get planning permission for a €1bn centre on O'Connell Street.

Galvin sees signs for optimism: "I'm finding things very exciting. There's a lot of dead wood after being let go across the board. People are going back to appreciating what they are buying. Now, they're doing it for a lift." ?

Roll-call of retail ruination

Research from insolvency specialists Kavanagh Fennell show that the retail sector has been badly hit by the economic downturn. Of the 365 companies that were declared insolvent between January and March, 57 of them were retailers. Only the construction and hospitality sectors were worse affected.

Amongst the retailers to have closed or to have gone into liquidation, examinership or receivership are:

?Principles

?Sasha

?Dynasty

?Zavvi

?Habitat (Ireland)

?Land of Leather

?Jim Langan Furniture

?Classic Furniture

?Haus

?The Shoe Store Ireland

?Tile Market

?Golden Discs

?Guess

?2woSeasons

?Chartbusters

?Golfworks