11.09.08 - Retail Footprint Ireland 2008 reveals largest Irish retail centres, current undersupply and future winners and losers.

The Irish retail market is set to be completely saturated by 2015 if all pipeline developments proceed as planned - with some currently successful centres set to lose out.

That is the key finding of CACI's annual study of the market in Retail Footprint Ireland 2008, which ranks retail destinations by expenditure and assesses the impact of pipeline developments on the future market.

The Retail Footprint rankings, based on an analysis of spend in 381 retail destinations in the 12 months up to and including August 2008, shows that Dublin tops the rankings with Belfast at number two, edging closer with the opening of Victoria Square adding ? 338 million to total spend. Blanchardstown moves from 4 to 3, edging ahead of Cork and benefiting from strong expenditure per head in the Greater Dublin area. Liffey Valley, Newry and The Crescent Shopping Centre all make progress at the lower end of CACI's Top 15.

But it is the prospects for Irish retail over the next seven years, analysed in Retail Footprint's Centre Futures study, which make for the most fascinating reading. The findings showed that, in 2008, centres such as Dublin, Waterford, Cork and Wexford have plenty of scope for retail growth. CACI estimates, however, that an additional 1.6 million square metres is planned to come to market in the next seven years; if all space is delivered it will create some interesting market dynamics.

For example, by 2015 CACI predicts a potential 19% fall in expenditure for central Dublin - despite 300,000 square metres opening in the Northern Quarter and Dublin Central schemes - because of increased competition from the Greater Dublin area. Limerick will also experience mixed fortunes with its Crescent Shopping Centre to gain 18% once its extension arrives in 2009, with this affecting Limerick town centre, with expenditure set to fall 20% by 2015.

"Irish retail is at a crossroads", said Nielsen Harrap, Principal Consultant, Location Strategy at CACI, who headed the research. "It looks like its potential is going to be fulfilled; it is a relatively young market and has the population, and expenditure growth, to be successful even during the credit crunch. The question is whether this positive outlook is sustainable. Even with forecast population growth of 8.1% up until 2015, 1.6 million square metres is a massive increase.

"As the market reaches saturation point there are bound to be winners and losers. Greater Dublin will benefit at central Dublin's expense. Mahon Point will lose out in Cork as developments such as the Cornmarket Centre, Opera Avenue and Maylor Street come on board. There simply won't be enough demand in the market to meet all this extra supply without some centres seeing a significant impact on their business."

Nielsen Harrap continues: "The extent of the losses for those that are vulnerable will depend on whether the new players have made the right planning decisions and if their moves have been backed by a sound location strategy.

"Meanwhile, retailers and developers with stores or investment in centres close to the new schemes need to consider the implications and potential impact on turnover and know which developments pose a threat, to help meet commercial challenges in what for them will be a tougher market over the next few years."