The UK’s nearest trading partner (and one of the largest), Ireland, is in a unique position during this COVID-19 crisis. Connected to Northern Ireland in land mass, it is an active member of the EU and is able to set its own ‘timetable’ in the approach to state aid and the gradual re-opening of businesses throughout the country.
Ireland with a population of just over 4.932 million has reported just 1615 deaths in occurrence of 24,735 coronavirus cases (as of 26th May). The country seems to have arrested the virus’ progression much more efficiently than the UK (it should be noted that schools closed on 12th March and large department stores took an early lead by closing on 18th March as total national lockdown was not declared till 27th March). Restrictions of essential travel were set at 2km and only extended to 5km on 18th May: this restriction of free movement within a very restricted area seems to have been key to the Irish success in ‘controlling’ the virus.
Brown Thomas’ lingerie department
Change in Buying Habits
Leading retailers, Brown Thomas and Arnotts reopened their online shops on 2nd April following an increase in website sales of up to 300pc when the bricks-and-mortar shops closed in March due to coronavirus. That was after a short 10-day closure of their online shops and after the introduction of additional safety measures at their distribution centres. Likewise smaller bricks & mortar retailers such as award-winning Contour of Stillorgan have been spending a great deal of time developing new transactional websites to retain customer loyalty whilst the front doors have to remain closed. This pattern of shifting purchases from bricks & mortar to online is not likely to simply disappear when shops reopen their doors.
And despite the relative success of their strategy and restrictions on public movement the Irish government is taking a very measured approach to lifting the lockdown. Adherence to the deadlines laid out by the government, headed by Taoiseach Leo Varadkar, has meant a schedule of 5 phrases of gradually lifting lockdown which commenced on 18th May with Phase 1. The second phase commences on 8th June marking the stage at which small retail outlets and open markets can open. From June 29th more non-essential retail outlets will be allowed to open (based on number of staff and customers per square metre).
If the virus continues to be contained and occurrence levels are flat or non-existent then on 20th July people will be allowed to travel outside their region and hairdressers, barbers, museums, galleries, places of worship and significantly, hotels and hostels with limited occupancy, will be permitted to open. August 10th will see the culmination of this five-staged plan with the opening of pubs, bars, nightclubs and casinos (with the usual social distancing and hygiene regulations). Schools will be the last ‘public’ sector to be opened in September and October 2020.
Contour of Stillorgan
Analysis suggests that the Irish unemployment rate, when adjusted to include all those on temporary income support from the government, could rise to almost 25 per cent over the April-June period. However, when the necessary containment measures are eased, the economy should gradually begin to recover and people will be able to return to work. Whilst the major focus is on domestic aspects of the current economic crisis – the closed offices, restaurants, bars, etc. – the Irish government has not lost sight of what the global economic outlook means for the Irish economy. The sharp decline in external demand will have an adverse impact on the exports of local firms there. And the economy’s integration into global supply chains means that the disruption to global trade is also likely to have a negative impact on Irish exports. However the sectors that proved resilient during the last downturn – pharmaceuticals and the broad IT sector – may prove so again.
