Over the past 18 months, Dublin's high streets have become unrecognisable and the question now is whether something like the Dundrum shopping centre better positioned to ride out the economic crisis at the expense of Dublin's traditional high streets?
Consumer spending habits are unlikely to shift in a more positive direction, which affects the ability of retailers to pay rents on high street properties. Across Dublin city, the retail locations are losing their appeal, whereas shopping centres such as Dundrum are able to buck the trend by offering their visitors a broad range of tenant mix, providing customers with more choice. The ability of shopping centre landlords to influence the tenant mix to ensure the customer has a balanced and wider choice has enabled them to prosper in comparison to the traditional Dublin shopping destinations.
I recently sat down with Derek Lovelock, chairman of Aurora Fashions, to discuss changing consumer behaviour and the retail patterns emerging from this recession. Lovelock says that in order to maintain their growth, the main high street retailers in the UK are opening larger stores, effectively forcing out smaller independent retailers. "What's happening in today's UK market is that retailers need to open bigger stores and in doing so need to sell more product which means offering lower prices. Is this providing more choice for the consumer? No. Only stock with the broadest appeal to the broadest market is on offer as the retailers have to drive high volumes from their big units. The result is a high street lacking real choice, innovation and originality; a less than appealing prospect for the future".
However, Lovelock contends that the Irish retail market has not seen this happen – yet. "There's still choice in the Irish retail market. The unique selling point for smaller brands and independent retailers like Karen Millen or Fran & Jane is that they sell edited, more exclusive ranges and at the same time offer a higher level of personal service and a more unique brand experience. That's how the independent brands compete against the bigger operators. During the retail boom, there was a big influx of retail brands into Ireland, which has now largely ceased as UK (and other international retailers) cut their investment in Ireland before too much damage was done, so there is still more choice available."
Given the economic situation, it was inevitable that the retail traditions and factors we usually take for granted would be replaced in the new retail landscape. "Pop ups" or "incubator" shops have emerged to take advantage of temporary leases on Grafton Street, in department stores and on main streets. Look at the temporarily-leased bargain bookstore next to Dubray Books on Grafton Street for an example of a great rent deal with no requirements to meet, diluting the Grafton Street criteria.
Grafton Street is in danger of going from one extreme to another, with the high premium-paying retailers such as Dubray suffering. Are these stores providing more choice to the consumer and offering a mutually beneficial arrangement for the retailer and the landlord who is trying to fill vacant space? Yes, they are. Is Grafton Street still the most exclusive and prestigious retail space in Ireland? No, it's not. Dundrum shopping centre is the first truly international grouping of eclectic brands under one roof, offering the consumer what he or she wants.
"Grafton Street is no longer the exclusive street it once was. Retailers used to pay premium rates for space on Grafton Street, but now anybody can set up shop in the available spaces. The major retailers want big retail spaces with the potential for growth, and Grafton Street is unable to offer this as it is largely unable to change its physical shape," says Lovelock. "Shopping centres like Dundrum are benefiting from their flexibility where Grafton Street is lacking."
The proposed Northern Quarter at Arnotts is a very ambitious project which looked set to take on both Grafton Street and Dundrum shopping centre, but this venture has been another casualty of the recession. With Arnotts falling into the hands of the banks, and Clerys showing no confidence in recovering from its recent loss-making year, it seems the trade environment on both sides of the Liffey is not sprouting green shoots by any means. The figures support the theory and the Central Statistics Office retail sales index indicates that the value of core retail sales is down 4.8% over the year to June.
Listening to retail consultant Eddie Shanahan's recent comments on what has happened to the retail landscape of Dublin, retailers would be forgiven for being confused. The former director of merchandising and marketing at Arnotts said the department store lost touch with its consumer base 'through a reduced own-buy policy', but also said hosting concessions make a department store stronger. He then knocked the presence of the same concessions in department stores across Dublin, yet maintained it is necessary to be consistent and offer consumers the brands they want and the stores they want to shop in.
The continuing rise in the success of Dundrum shopping centre is due to choice, well-structured combinations of concessions, good unit-space and an element of control. Much emphasis was placed on the right mix of tenants – both retail and leisure. Schemes which have sacrificed long-term strategy by choosing to accept any tenant with the immediate ability to pay have left themselves vulnerable to future developments. Lovelock contends: "Grafton Street is in danger of ending up as an accumulation of varied retailers placed incoherently, without logic. It is largely a case of whoever can pay up can set up shop."
The Irish retail landscape may have recently changed but is it "forever"? According to Lovelock: "Forever can change again next year, or the year after that." Let's just hope the current weakened Dublin City retail landscape won't be an everlasting casualty of this recession.

Ian Galvin is chairman of Aurora Ireland