Country’s emptiest street sees little hope
“The fillet steak died a death,” said Mr Clarke, 57, who runs a store on Grattan St in Sligo.
His sales have dropped 40% since the economy imploded in 2008 and have further to fall, he said. “They’re buying the cheapest cuts now.”
Set against the backdrop of Benbulben mountain, which helped inspire WB Yeats, Sligo illustrates the two-speed nature of Ireland’s recovery and the challenges facing the Government as it prepares to exit the bailout the State entered three years ago. Taxpayers face €2.5bn in spending cuts and tax rises in the budget next week.
While signs of revival are emerging in Dublin, elsewhere the economy remains moribund. One in four stores around Sligo’s Grattan St lie empty, the highest vacancy rate in Ireland, real estate firm CBRE Group said last week.
With consumer spending still falling, the Central Bank lowered its growth forecast for this year and 2014.
“Retail spending remains subdued,” said Alan McQuaid, an economist at Merrion Capital. “Things aren’t going to get dramatically better until the labour market improves and disposable income increases.”
Retail sales have fallen in three of the last four years, as taxes rose, unemployment tripled, and mortgage arrears surged following the worst property crash in Western Europe.
Consumer spending, which accounts for about half of the economy, has fallen for the last two years, and will drop 0.4% this year, the Central Bank said last week.
The legacy of the crash is more apparent outside Dublin, European home to companies like Google and Facebook.
Sligo is suffering far more, and Mr Clarke reckons it will get worse with next week’s budget.
Finance Minister Michael Noonan said yesterday that tax increases and spending cuts will amount to about €2.5bn next year, scaling back an earlier plan for €3.1bn of adjustments.
“It’s going to drive sales further down, I have no doubt,” Mr Clarke said.
“If they have to pay extra taxes on fuel and God knows what else might come in, they’re just not going to have the money to meet everything.”
Regions outside Dublin had a greater reliance on the building industry before the recession and attract less foreign investment than the capital, according to Dermot O’Leary, an economist at Goodbody Stockbrokers.
Instead, areas such as Sligo are trying to draw tourists, playing on the windswept landscape, lakes, and Atlantic Coast beaches which helped inspire Yeats.
“Those regions are suffering a bigger hangover from the construction collapse because they had a bigger party,” said Mr O’Leary. “Labour markets are weaker, consumer spending is weaker. They’re still feeling the effects of the downturn.”
Unemployment in Dublin, which accounts for about two-fifths of the economy, was 12% at the end of June, compared with almost 14% in the west of the country.
Back in Sligo, it’s hard to see signs of revival. DNG Flanagan Ford, for example, dropped the annual rent on a former bagel store 70% to €12,000 a year to try and find a tenant for the vacant unit.
“If something happens in Dublin, it’ll be a number of years before it happens down here,” said Walter Murphy, an auctioneer for 30 years in Sligo.
“That’ll always be the case.”
Murphy, wearing a tie with black and white stripes that matched the Sligo flag, said he sold land for about Ir£12,000 (€15,240) per acre in 1994.
An investor bought a nearby site for about €1m per acre 10 years later.
A similar site would sell for between €50,000 and €80,000 per acre today, Murphy said. Prices in Sligo have at least “plateaued”, he said.
Empty retail units close to Murphy include the Sligo Kebab Shop, a former camera store, and a 24,000 sq ft office unit that used to house the ESB.
A restaurant near Grattan St shut last week.
Mr Clarke, the butcher who has worked on Grattan St for 43 years, said his customers are still swapping fillet steak for minced and diced beef.
“We’ve very limited industry in Sligo,” he said.
“There’s nothing to generate jobs.”
