Once thriving town is down but not out as recession hits home
On a return visit since the last budget Claire O’Sullivan found a town struggling with a new reality
IT’S arguably one of the finest days we’ve had this year as I drive into the west Limerick town of Newcastlewest. The sky is bright blue, without a trace of cloud, and a few brave young women walk around in short skirts and T-shirts, clearly having slathered on fake tan the minute they spotted the morning glory.
Thursday is market day in Newcastlewest and there’s endless rails of clothes and boxes of farm produce for sale on the Square. Today the town, considered the capital of west Limerick and a shopper’s paradise, should be buzzing. It’s not.
“It’s like a morgue out there,” nods Declan Murphy. “Thursday and Friday were always busy shopping days in Newcastle. Not anymore. The only day there are any customers around is Saturday.”
That’s some turnaround for a town that eight years ago was the fastest growing in the country and boasted an array of up-market boutiques that rivalled Galway or Cork. In the 20 years up to 2002, Newcastlewest’s population doubled to over 8,000 and it had the highest influx of immigrants per head of capita of any town in Ireland. Now its record breaking tells a more grim tale. Up to 2,570 people from the town and its environs signed on at the local dole office six weeks ago — a 97% increase on the year previous.
The scale of the change isn’t lost on Declan Murphy, who after six years in Australia uprooted his Australian wife and three children and returned to his hometown last summer to take over his father’s menswear shop. Murphy’s Menswear has been in the family since 1890 and his enthusiasm at taking on the mantle is evident immediately. However, during the 25 minutes we were in his shop, not once did the bell above the door herald a new customer.
“I traded well until Christmas and since then there has been a massive downturn. There is such fear out there. But I worry that by not spending, all we’re doing is digging a bigger hole for us all,” he says.
Declan dismisses the notion that recession hasn’t hit Australia, saying that the department store he worked in as a deputy manager, David Jones, has seen a 15% drop in turnover this year. “That’s a loss of €20m-€30m for them,” he said. “It is certainly hitting there.”
David admits he picked a tough time to come home but he’s not losing heart. “People and government will have to use their initiative. You will have to find different ways to get people to buy,” he says.
Suits he once sold for €275, for instance, he first dropped to €200, then €180. They’re now selling for €125 and posters on the shop front alert passersby to the 20% reduction across all stock. It’s all about survival now, say Newcastlewest retailers. Declan tells me one of his competitors is now offering a free shirt, tie, socks and shoes with each suit bought. Things are that tight.
Like many a Limerick man, Declan is a rugby fan. He draws his analogies from the Irish team and their success in Cardiff last month.
“The Irish team last month had the same squad as they had for the past numbers of years. The only difference was a new coach with ideas and the ability to motivate. That is why they won the Grand Slam and that is what we need. Who is leading and coaching this country at the moment?”
Further up the town is O’Doherty Furniture. Its owner, David O’Doherty, is in business since 1980. His is a basic operation: the shop is a glorified warehouse with concrete floors and bare walls and none of the recreated living rooms and bedrooms that feature in latter day furniture showrooms.
David’s business acumen strikes you as soon as you strike up conversation. This man has weathered one recession and isn’t fazed by the current slowdown. “I did well, to a degree, in the past 15 years. It wasn’t easy. I worked hard. I put money into the business,” he admits.
David sells new and second-hand furniture but he also refurbishes furniture and antiques and does re-upholstery. He didn’t get carried away by the housing boom by just honing in on the legions of first-time buyers and it is this breadth of market that gives him a comforting confidence about our current economic woes.
At the height of the Celtic Tiger, his business was 50:50 re-upholstery to furniture sales. Now it’s 75% re-upholstery as a new frugality leads people to re-upholster a much-loved sofa rather than automatically dump it and pull out the Visa.
“I’ve found through the years that if you’re quiet in one side of the business, you pick up in the other. I’m not worried about what could be ahead. I am well established. I have large numbers of repeat customers that will always come to me for their furniture needs. I am just getting on with it. I’m well known. I’m not new to this game.”
Up to August last year, he had six full-time and three part-time staff. One of the part-timers retired and another has had an operation which means he can’t work. One of his full-timers also left last year for health reasons. None of them have been replaced as “I could see the start of a change” he says.
David’s great hope for the budget is that the Government will rally the troops and that consumer sentiment will subsequently lift. “People are just constantly hearing how bad it is. They have tensed up and are holding back. There’s still money out there. There are plenty of people that are well off. They have their mortgage paid and their children gone and have a good disposable income.
“Many others have secure jobs like teaching, nursing and the gardaí. These are the people that are afraid and shouldn’t be. I just keep on saying to stop focusing on the 10% who aren’t working and remember 90% are.”
Across the country, there’s constantly talk about ‘the money that’s still out there’. If there’s anywhere that this elusive money is being spent in west Limerick, it must be in the upmarket Ela Marie — which attracts fashionistas from as far east as Kilkenny and as far north as Sligo.
Before the last budget, we spoke to owner Mary Hayes about how the downturn was affecting them. She was upbeat last October but this time, she’s less sanguine.
“The special occasions are still there but that will only be a seasonal thing. Most people that are buying for a wedding, Communion or Confirmation will nearly have bought at this stage. It’s the rest of the market that you can’t guarantee. People’s wealth has been destroyed by the collapse of the financial markets.
“There are a group of older couples that come in here that have lost so much with the collapse of the share market. They thought that they would have a comfortable old age, having invested in reliable shares, but now they are finding their pensions reduced by up to two thirds,” she says sadly.
“There are also many older couples who are now helping out their children with mortgages as they have lost their jobs and have huge mortgages. I hear these stories everyday. There are so many stresses out there. I hear it from customers that have come to me for years and that would have bought two or three items and now only buy one. People tell me they were millionaires last year and now they are scared for their future.”
Mary and her daughters have opened up a sales shop up the street which she urges me to check out. Clothes, she says, are selling at a fraction of what they bought them for. They have to shift the stock as fashion doesn’t wait for an upturn.
When I visited Newcastlewest auctioneer Colm O’Donovan last year, he was disillusioned to put it mildly. The owner of the local Sherry FitzGerald branch admitted to being “shell shocked” at the speed and scale of the property collapse. This time around, some of the despondency has lifted. January and February 2009 were “slow”, he says, like the end of 2008 but since March, there’s been a stirring amongst first-time buyers. “More people are daring to stick their head up and test the waters. We’re seeing shoots of encouragement. I’ve been doing more viewings. There’s people ringing and coming to look at what’s on the market. I always thought people had an interest in buying but they were scared. Now, I’m pointing them at the value.”
Colm says that the Newcastlewest rental market is strong but with interest rates at historic lows and prices “near bottom”, he believes people will soon realise that “it’s cheaper to buy than rent”. A four-bedroomed house in a rural setting outside the town can now be bought for under €250,000 compared to €400,000 three years ago. Public servants, the only first-time buyers getting mortgages, are seeing this value for money, he says.
Down by the river, I venture into Cleary’s. Seamus Cleary was born to be a publican. The banter comes easy and he prides himself on knowing what’s going on across town. His business hasn’t slowed down but he feels that publicans elsewhere are being crucified by cheaper prices up North.
“A friend of mine from Cork was telling me that he went to Newry, to Aldi I think, and spent €969 on drink,” he says leaning over the mahogany bar.
“When he came back down, he checked what he got against Tesco and the same drink would have cost him €1,773 here.
“That is incredible. It’s worth someone’s while to travel from Cork to Belfast for drink,” he exclaims.
“I can’t imagine what it must be like for publicans in Dublin, Donegal and around the border. Anyone can just shoot up or over in under an hour. Something has to be done about it in this election,” he says.
Sitting up at the bar is one of Seamus’s regulars. He doesn’t want to be named but pips in when he hears us discussing the north/south excise imbalance. He was looking to buy a 2008 Audi A6 and checked out prices on both sides of the border.
“The A6 would cost me €34,800 here and in some of the dealerships in Belfast, where they will sort out duty and everything for you, it would cost me just €27,400 to drive it back over the border. That’s saying something isn’t it?” as he takes a sip of his pint.
Both men say their lives have not been damaged by the country’s downward slide. “I wouldn’t say I’ve been hugely affected” says Seamus, “as my customers are older — in their 40s, 50s and 60s — but I am aware that the workers haven’t gone from Dell or Kostal yet. Maybe it is yet to come.”
Seamus’s sympathy lies with young people with young children and huge mortgages that are losing well-paid jobs in Dell and Kostal. Many of Dell’s 1,900 workers are in West Limerick while 200 jobs are due to go shortly at Kostal in nearby Abbeyfeale. A further 300 jobs went at Castlemahon Chicken in the past year while in 2005, the local poultry industry was dealt its first blow with the loss of 150 jobs at Kantoher. None of these local processors could compete with the cheaper meat coming from Thailand.
THE GENERAL feeling in Newcastlewest is that it’s the younger people, those in their 30s, who have been worst hit by the recession. They all had to buy houses and mortgages at inflated prices and are watching their jobs in construction and IT disappear and their home values evaporate.
Caroline Doody is the owner of Promenade, a funky mid-market clothes shop aimed at this very group, 20-40 year-old women. She knows all about the recession. Her husband has just gone back to work after being unemployed for nine months. She is relieved for him but her own future is far from certain.
Her sales are down 50% on last year and so is footfall. Like everyone else, she says Saturday is “the only day” that anything sells.
“Some people say that they think now we’re at the beginning of the end. My fear is that we’re at the end of the beginning,” she says.
Her latest marketing strategy is to take deposits for items and allow 4-6 weeks to pay in full. “I’ve cut my margins as low as I possibly can. It’s just about survival,” she says.
Caroline’s husband got his new job in Galway. Living 100km from your husband when you’ve got a six-month-old is far from ideal, I say. She says it just has to be done.
Possibly harder on her was returning to work when her baby was five weeks old as the changed economic climate meant she couldn’t afford to pay a full-time employee.
“I could see people looking at me shocked when they saw me in the shop. It wasn’t my choice. I couldn’t afford to stay at home.”
I ask her if two years ago, she’d have taken six months off. “Yes, I would have. Without doubt.”
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