Tuesday, June 4, 2013

Our Potemkin Economy

There are seven shops vacant on Main Street, Blackrock. Double that number if you include the side streets and nearby shopping centres (including my favourite restaurant Dali's, now sadly no longer with us). Blackrock is still an affluent place in comparison with much of the rest of the country. And yet, in nearly twenty five years living here, I can't recall anything as bad as this.

The sheer duration of this recession is partly to blame. Most businesses can survive a bad quarter or two, even a bad year, but five years in a row is too much for many. Unfortunately, recovery won't be the balm to heal all wounds. In the UK, they're talking about more than a fifth of stores closing between now and 2018 due to their own economic difficulties and the rise (and rise) of internet shopping. Back in Ireland, at the height of the boom, we had the second highest shopping space per capita after the Netherlands. So I suspect we'll be tracking UK retail trends for a while, if not getting ahead of them...

We now have an increasingly surreal street scape in some parts of Ireland (North and South) as 'fake' shop fronts appear to mask the empty stores behind. Mike Krieger talks about the Potemkin village feeling in Fermanagh ahead of the forthcoming G8 summit. Like the one in the photo I took in Beacon shopping centre at the weekend.

Empress Catherine II may have been suitably impressed by the original Potemkin villages during her visit to the Crimea in 1787, but Irish consumers (and quite a few retailers stuck with upward only leases) will be much less impressed by our home grown attempt.

Meanwhile our banks, pension funds and landlords will have to come to terms with the reality that fake shops containing fake customers amount to nothing more than fake property valuations. A Potemkin economy is just that: a fake.

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