Spend, spend, spend was the message to the nation from Michael Noonan, the finance minister, last week — and the nation promptly rolled its eyes. The words “flippant”, “comical” and “mad” were used to describe the minister’s comments.
One newspaper poll found that nearly half of us don’t believe we have enough money to go on a shopping spree. Yet last month Ikea, the Swedish furniture giant, unveiled a pre-tax profit of €11.4m for its Irish operation, making the store at Ballymun the most profitable branch in Europe.
Now John Lewis, the venerable British department store, has announced that Irish shoppers can buy its own-brand and designer homewares (and fashion) online. Overseas retailers, it seems, have more faith in Irish buying power than we do in ourselves.
For John Lewis, the web store marks its first step into the Irish market since a proposal for a flagship shop on O’Connell Street in Dublin was shelved. Most Irish buyers will already be familiar with the brand, having seen one of its emotionally wrenching television advertisements in which every prop is a John Lewis product.
The homewares now available to Irish buyers include the company’s best-sellers such as bed linen and curtains, as well as designer accessories, tableware, rugs and textiles. The delivery charge is £7.50 (€8.35), but Irish buyers cannot purchase items that require two-person delivery so furniture and electrical items are off limits.
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By the end of last week, John Lewis said Irish-based shoppers had placed hundreds of orders from a selection of about 30,000 home products. Early this week, the list will grow to more than 100,000 items.
The homewares labels available include Designers Guild, Harlequin, Sanderson, Celia Birtwell, Pip Studio and Cath Kidston — some of which are also sold in Irish stores. John Lewis does offer accessories that are not available here, such as certain poster prints, brands of cookware and pieces by British designers with which it has collaborated.
The department store’s own-brand offerings, particularly its bed linen, are expected to be as popular in Ireland as they are in the UK.
Arnotts, the country’s oldest department store, is our closest equivalent to John Lewis, albeit on a smaller scale and with one big difference: John Lewis is an employee-owned co-operative, whereas Arnotts is now owned by the banks after it incurred huge property losses. It, too, has an online presence and a good reputation for homewares, specialising in medium to premium-range brands.
Ger Ryan, head of homewares at Arnotts, says it is not nervous about the prospect of a giant retailer such as John Lewis muscling in on its terrain. He says Arnotts’ online presence has recorded 100% growth year-on-year and there is now an in-house team dedicated to it.
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“Of course we have to watch the online price points of competitors and we are aware of what they are offering,” he says. “But even though price is a key thing for people, customers now need the element of trust even more. The throwaway culture is gone and people are buying for longevity now. As an Irish company, they know us and trust us, and that is more important than ever.”
Ikea’s sales figures in Ireland offer a different picture. The terms “trust” and “flat pack” aren’t often put together, yet we have been happy to spend €2m a week at Ikea for more than a year, wiping the floor with Irish retailers who appear to be bearing the brunt of fickle consumer sentiment. The idea of a John Lewis flagship store looming over our main street may please the consumer, but it could be bad news for cash-strapped Irish retailers with tiny marketing budgets.
While John Lewis says it has no immediate plans to open a shop here, Andrea O’Donnell, commercial director at the company, says Ireland has been earmarked as a market for the long term. “We looked at the O’Connell Street development, but it never went ahead, and we are still keen to get into Ireland,” she says.
“It is difficult for now, but it is important to have a store here so that we can have a multi-channel presence. We know many people will research our products online, but prefer to buy it in the shop.” This is a strategy that stores such as Arnotts have relied on.
For now, John Lewis is happy to make an online-only debut in a market that it perceives as comfortable with web shopping.
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“Ireland is an attractive market for us. It has a progressive digital economy with strong online penetration,” says O’Donnell. “That isn’t true of all countries. Spain is very much a home and TV shopping market, while Germany is quite catalogue-based. But Ireland is highly technologically literate.”
That’s us — bad at economics but handy with a mouse. And as far as homeware retailers are concerned, poised to spend, spend, spend. But not necessarily at home.
ikea.ie, johnlewis.com, arnotts.ie