Shoppers search for bargains as stores cut prices in a bid to beat the economic downturn.

CHRISTMAS has come early for Irish bargain hunters.

Retail giants have started to slash prices in an attempt to beat the economic downturn.

Unprecedented fears have gripped store owners.

Deputy chief executive of Debenhams Michael Sharp warned the retail sector is “staring into the face of the worst Christmas we have ever had”.

British-owned chain stores have been first off the mark to entice reluctant Irish shoppers to part with their cash. Marks & Spencer cut clothing and hardware prices by 20% on Thursday in its biggest one-day promotion for four years, while Debenhams also discounted stock amid concerns the credit crunch will hit ailing multinational retailers the hardest.

In Dublin, a Santa stunt man abseiled the front wall of Clerys Department Store on O’Connell Street to highlight a pre-Christmas sale. All over the country, from Bantry to Belfast, sale signs are being placed on the windows of giant retailers and small local stores alike.

While stores are bracing themselves for the worst holiday season trade in decades, analysts say consumers appear to be delaying their Christmas shopping, hoping to catch bargains as more retailers begin to offer large discounts.

According to the latest figures from the Central Statistics Office, total retail sales are down more than 6% on 2007 levels and the prediction is that shoppers will be spending 5% less this Christmas.

However, German discount store Aldi appears to be bucking the trend. Its total sales have rocketed by 26% this year to date, driven by middle-class shoppers flocking to its stores during the credit crunch.

Aldi is estimated to have a 4.5% share of Ireland’s grocery market which overall is estimated to be worth anything between €8bn and €15bn yearly. Its immediate rival Lidl has just under 3%.

Aldi’s sales in Ireland and Britain jumped by 36% in September and 33% in October.

Paul Foley, managing director of Aldi UK and Ireland, said: “You need sometimes a little jolt to try something new and the squeeze on consumers’ finances has been an incentive to, at the very least, give us a try, and that is what I am putting down to the last two to three months trend.”

However, Mr Foley insists Aldi’s success is not all down to the recession. Speaking during a tour of Aldi’s Irish stores, he said: “There is a squeeze on consumer finances right now, but we wouldn’t be winning business if it wasn’t for the quality of our produce.”

He added: “Thirty six per cent sales growth is record stuff. We have won a remarkable amount of new customers away from the supermarkets. We are continuing to grab more business and I think it will be very difficult to wrestle it away from us.”

According to Danny McCoy, of IBEC, increased competition can help retailers weather the crisis.

“If we are nimble as a country and if we can put our emphasis back on competitiveness, something that was sadly lost in recent years, we can emerge from this much stronger, as a country,” he said.

Debenhams say their stores are packed with shoppers attracted by a 20% reduction in all stock.

“The stores are packed and there’s a great buzz about the place. Early indications show customers are reacting well to the great offers,” said Ed Watson, the company’s head of public relations.