Set to shine
Published: 18 February, 2008
While Northern Ireland was still affected by the recent market changes and 'credit crunch' the current outlook for the retail, jobs and business market in the country is still very much a positive one.
Earlier this year the Confederation of British Industry director general Richard Lambert warned that 2008 was going to be a "difficult year" for the British economy. However, he also said it was important "not to exaggerate the risks and talk ourselves into a more serious downturn."
He added that the most likely outcome was going to be a "soft landing" as the economy slows.
But in Northern Ireland the predictions are much more favourable. Figures released in January by the Department of Enterprise, Trade and Industry showed an increase in employment levels. Economy Minister Nigel Dodds added: "The number of people in employment continues to rise, which is testament to the strength of the Northern Ireland labour market. The latest unemployment rate is well below the UK average and is second lowest among the UK regions."
And the Executive has also made a commitment to small businesses. Last September the Federation of Small Businesses conducted a survey in which 53 per cent of respondents called on the government to "remove the big business bias from all services."
Reacting to this, Minister Dodds told the small business community in December last year that the "small business sector is hugely important to the local economy. It is vital that we explore new ways to develop smaller enterprises as they are fundamental to Northern Ireland's growth."
Later in the month the government made a commitment to make the development of the whole of Northern Ireland's economy its number one priority.
With all this in mind and the increased flow of big businesses into the country it seems Northern Ireland's outlook for 2008 is probably a lot more positive than previously believed. Ian Morrow from the Northern Ireland Chamber of Commerce said that while the country witnessed a general slowdown in spend over the Christmas and New Year sales period, and taking into account the "speculation about recession and the credit crunch," he firmly believes "the retail sector in Belfast should perform well, given that levels of disposable income, especially in a largely public sector economy, should remain stable."
He added that with the influx of new outlets such as Victoria Square and Ikea, customers may be drawn to spend based on the 'novelty factor' of these places.
Andrew Irvine, Belfast City Centre manager, is far more positive about the city. He said: "We have seen from the figures that we have had the strongest January to date in retail and sales figures in 2007 were very strong.
"With more choice and more time to shop, especially with the introduction of our three late nights shopping during the opening of Victoria Square, I believe it will be a very successful year for retail in Belfast."
The Lord Mayor of Belfast, councillor Jim Rodgers, echoed Irvine's comments adding: "With 6.8m people choosing to visit Belfast in 2007 and spending an amazing £324m, retail is clearly integral to our tourism."
But what effect will the opening of Victoria Square really have on business here in Northern Ireland?
It is generally believed for the most part that - as a novelty - it may drive some business away from rural shopping centres. However, it is also felt that its opening could prevent leakage across the border or to England for the same goods.
Ian Morrow said the Chamber of Commerce believes the opening of the Victoria Square development will bring a "much-needed boost" to a part of the city that in recent years has seen a downturn in retail activity.
"We also welcome plans by Victoria Square to extend opening times in the evening and believe that this will encourage a growth in the evening economy. This will be an essential development if Belfast is to continue to market itself as an important tourist destination," he added.
Morrow also speculated that the smaller retailers and existing outlets will also benefit from the additional footfall in the city and also additional retail competition which will in turn benefit the consumer - possibly leading to greater spend.
Despite being asked to comment on what the possible negative effects on small businesses were as a result of the opening of Victoria Square and Ikea, both the Federation of Small Businesses and the Northern Ireland Independent Retailers Association declined the opportunity. And following a recent BT Business Regeneration Report, which showed that small businesses in Northern Ireland feel they have a bright future with 58 per cent stating that the area is a flourishing region of business regeneration and 26 per cent saying they have a great future, the question is - are or will the small businesses be affected at all?
Andrew Irvine, city centre manager, said smaller retailers should not worry because once the novelty dies down and footfall increases, people will start spending more money in the city as they walk from one major shopping centre to another.
"Victoria Square will bring to Belfast a sector of retail that the city has not seen before - it will being a dimension that should shake other retailers to lift their game - for example, re-do shop floors, retrain customer service staff in what will be a very competitive industry."
Minister Dodds said that as Northern Ireland continues to perform well the ball is now firmly in the court of the retailers.
He explained: "I would urge businesses to seek new opportunities for innovation, research and development and improved productivity as a key strategy to promote growth.
"I am convinced that we must achieve greater levels of economic growth and prosperity." While the outlook for Northern Ireland in 2008 is positive, for retailers this could be a time of great prosperity or it could spell the end if they refuse to move with the times.
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=== Mixed feelings towards Ikea opening in Belfast ===
The opening of Swedish furniture store Ikea in Belfast has been heavily publicised in Northern Ireland and similarly so have the reactions to it.
The Northern Ireland Chamber of Commerce has a positive feeling about its opening.
"The investment of a big brand is welcome and based on current anecdotal evidence, Ikea's presence is unlikely to affect out-of-town shopping adversely; indeed it's presence could act as a catalyst to the further development of the Holywood Exchange, which currently has a number of empty units, as well as encouraging other big brands to consider Northern Ireland as an investment opportunity," said Ian Morrow of the Chamber.
Andrew Irvine, Belfast city centre manager, is less enthusiastic about the growth of out-of-town shopping areas.
He said: "Ikea alone will not make a difference whatsoever but once the blocks begin to appear and other larger names follow, such as Marks & Spencer and Boots, and they become out-of-town shopping centres, then I believe that could be dangerous.
"Figures in the past suggest that out-of-town shopping can have a negative effect on the city centre."
One businessman who has not welcomed the opening of the furniture giant is Michael McCartney.
He claims that his Belfast furniture boutique White Line Furniture in the city centre has been forced to close its doors because of the recent opening of Ikea.
He said he felt he was the first casualty of the retailer and won't be the last. He added: "Big box retailing is killing off local independent shops.
"I decided to close the shop's doors as soon as I heard Ikea was coming to town.
"We felt our days would have been numbered. Its reputation precedes it and when we knew it was definitely set to open we began to monitor the figures and we have definitely seen a drop.
"Belfast is losing its individuality, a high street without independent shops will be boring - everyone and everything will end up looking the same.
"I beat Ikea on styling but haven't got a chance to compete on price. If I was selling computers it would be like going head-to-head with Bill Gates.
"The funny thing is our 'closing down' prices beat Ikea's 'opening' prices but this was only for a few weeks until we sold off all the stock."
