The true cost of Irish cities being locked down is revealed in the report

The Amici Bistro on Kilrush’s Moore Street has closed (although a new restaurant will open on the same site in the coming weeks), an electronics store has closed its doors and where there were once four convenience shops in the town center there is now just one, according to councilor Ian Lynch.

In fact, as of the fourth quarter of 2021, 26.2 percent of Kilrush’s commercial units were vacant, the fourth-highest vacancy rate out of 80 cities analyzed in the GeoDirectory Commercial Buildings Report released earlier this month.

“Traditionally, it was a market town and the centerpiece was commercial buildings,” says Lynch.

“Like many towns in rural Ireland, we have fallen victim to depopulation and an aging population, so we have a fair number of vacant properties. Then came Covid. It’s been so volatile for retail and other businesses that deal with the public that people didn’t have security.”

Now, Lynch sees these companies facing new existential threats: Inflation, spurred by a global energy shock exacerbated by Russia’s war in Ukraine, is eating away at local disposable incomes and driving up costs Time to withdraw Covid support.

“Business is being met,” he says. “Clare County Council plans to increase commercial prices this year. People had just started spending again. Now, with the war, people are saying, “Maybe worse is coming, so I’m not going to spend that much money this weekend.” Instead of going out to rugby on both Thursday (St Patrick’s Day) and Saturday, I only go out on one of the days.

“The costs for businesses like hardware stores, hardware stores and clothing retailers are going up, so people are looking for cheaper alternatives like Penneys.”

The GeoDirectory report has revealed the damage caused by Covid lockdowns and restrictions on the commercial landscape. Nationwide, the commercial vacancy rate reached 13.9 percent in the last three months of 2021, the highest level since GeoDirectory first began tracking vacancy rates nine years ago.

The figures are compiled by a combination of delivery staff from An Post Network and Ordnance Survey Ireland, both organizations having set up GeoDirectory to create and maintain a database of commercial and residential buildings.

The report, produced by EY, indicates that locations with high reliance on retail, wholesale, tourism and hospitality – many along the west coast – suffered from forced hospitality closures and accelerating the shift to online retail, said Dara Keogh, CEO of GeoDirectory.

For example, a third of Kilrush’s business premises are involved in retail and wholesale – the highest proportion of any of the 80 cities surveyed.

“Covid has fueled the growth of the internet and that has impacted the business model of some companies,” says Keogh. “Inflation has been high in recent months and confidence is eroding for an entrepreneur looking to enter the market.

“When you open a retail store, you have all these factors that weren’t there 10 years ago, like new higher inflation and changing consumer behavior. If you want to compete with online businesses, you have to bring consumer experiences to the table.

“The trend for 2021 has been up in vacancy rates and you have to imagine that with Covid supports gone and costs rising that may not be borne by consumers, more businesses will come under pressure. And there are many companies that have already tightened their reserves because of Covid, which means they are more vulnerable to new shocks.”

Before the pandemic, there was a regional imbalance in commercial vacancy rates, the GeoDirectory report highlighted. However, the economic consequences of the health emergency widened the gap between the west and the east of the country.

In fact, the seven counties with the highest vacancy rates in the fourth quarter of 2021 were along the West Coast.

In Sligo, the highest of all boroughs, one in five commercial units was vacant and Westport in Co Mayo was the only town in Connacht to have a vacancy rate below the national average – just 12.7 per cent of its commercial units are vacant.

In the east, just 10.2 per cent of units are vacant in Meath, 10.4 per cent in Wexford and 12.9 per cent in Dublin, although that was the capital’s highest level in five years. The affluent village of Greystones to the north of Wicklow had a vacancy rate of just 7.9 per cent.

Annette Hughes, Director of EY Economic Advisory, says: “It’s fair to say that the trade sector in parts of the country faced its own challenges before the pandemic. We had seen a noticeable divide between the west and east of the country. I think it’s always been there and I’ve been doing these reports since 2013 and look at the data twice a year.

“We invariably see that many of the western and northwestern cities feature prominently among the cities with the highest vacancy rates. Westport and Greystones are among the really attractive places that people flock to, and others are not as popular and don’t attract the same number of people. Cities thrive on people spending and businesses thrive on people spending and people working.

“Perhaps companies are more drawn to the east of the country than to the west. There is no doubt that these high vacancy rates have to do with a lack of frequency, a lack of employment, a lack of population and a lack of income.

“So where we’re seeing job growth, we’re probably seeing it in certain parts of the country and not others. If businesses falter in one location, there will be no attraction for others to set up a business there.”

Kilrush, for example, benefited little from the pre-Covid economic recovery. In 2017, it was ranked as “very deprived” by the Pobal HP Deprivation Index, based on 2016 census figures, with the nonprofit noting that 58 percent of men and 53 percent of women were unemployed and only 8.6 Percent of the city’s population unemployed had tertiary education.

Young people went to Australia, Canada and the US, Lynch says, although many people returned to Kilrush during the pandemic.

Between 2004 and 2014, Kilrush lost eight pubs and a total of 53 shops, including 19 on Moore Street alone, although according to 42 shops opened in the town over the same period The Clare Champion in 2014.

In addition, large retailers such as Tesco and Aldi opened on the outskirtswhich increased the pressure on smaller retailers.

It has been more than half a century since journalist John Healy’s book lamented emigration from his hometown of Charlestown, Co Mayo, and the decline of rural communities No One Shouted Stop (The Death of an Irish Town). The growth of out-of-town retail developments and the closure of banks and post offices meant that commercial property vacancies were rising in the west of the country before Covid hit.

Now small towns and villages in the west, north-west and border region face “catastrophic” economic and population decline unless the trend of vacant and derelict homes and lots is reversed, according to the Northern & Western Regional Assembly, which published an analysis of the problems in January. It found that more than 44,000 homes and commercial properties in the region are either empty or derelict.

Dublin city center has been far from immune to the effects of Covidwhich suffers from both a shortage of office workers and tourists. GeoDirectory analysis of 22 streets in Dublin 1 and 2 revealed a commercial vacancy rate of 13 percent, with rates in excess of 20 percent in five streets. Dublin 2 saw the largest year-on-year increase in vacancies, up 3.1 percentage points to 16.8 per cent.

As the pandemic hastened the demise of already struggling fashion chains, Grafton Street saw the departure of high-profile tenants like Tommy Hilfiger, Topman, Monsoon and Cath Kidston. Instead, new international retailers are increasingly taking to the streets, like athleisure brand Lululemonwhile Lego is opening a store there this summer, combining physical and digital experiences.

Flannels and H&M will occupy the retail floor of the newly developed Clerys Quarter on O’Connell Street.

Hughes says: “The agents tell us that international retailers are looking back to the city of Dublin because it’s a big city with big jobs and high income.

“So there’s a lot of opportunity for shops and high street and anchor tenants, big chains and small retailers. The city center will come back in time.”