Ulster peace dividend is on the way

The ceasefire boosts retail and property, but investment is the key, Richard Phillips reports
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The Independent Online
J SAINSBURY'S decision to expand into Northern Ireland is expected to trigger a bout of copycat moves as other supermarket chains rush to stake a claim in the UK's last under-developed food retailing market.

Local opinion suggests that the first tangible benefits of the peace dividend are at last starting to flow with the unveiling of Sainsbury's plan last week to open seven supermarkets in the province.

A spokeswoman for Asda says the group is actively searching for suitable sites in the North. Analysts say Tesco is likely to jump on the bandwagon and Argyll-owned Safeway is another likely contender.

Several mainstream retailers have well-established operations in Northern Ireland, but the food stores have, until now, steered clear of the province. Marks & Spencer is an exception, with the largest food store in the group in Lisburn.

Ulster Television is one company which hopes to emerge on top from the coming supermarket war. "Whenever new competition emerges, in our experience promotional spending rises, and not only from the newcomers," says its managing director, Desmond Smyth. Overall though, he reckons the impact of the peace thus far remains neutral. UTV itself has lost some security advertising as a result of the ceasefire, while hefty expenditure on security as a whole is falling sharply.

Longer-term, he agrees, there can only be winners. "But it won't be until 1996 when we see the really big gains coming through," he forecasts.

Retailing and tourism offer most evidence of a payoff from the ceasefire. Belfast is engulfed in a mini-boom as shoppers flock to the city. Many had refused to visit during the Troubles. There is also increased activity near the border as shoppers visit from the South.

Castle Court, Belfast's main shopping centre and the largest in Northern Ireland, has seen visitor numbers explode. Its director, Alex Bell, says Castle Court must be unique among UK shopping centres in having zero debt and being fully occupied.

"We have demand for units which we can't meet," he says. "There is no other explanation for the growth than the peace." Visits are now running at a rate of 260,000 a week, 24 per cent ahead of the equivalent period last year.

Deirdre Stewart, assistant director of the CBI, Northern Ireland, sounds a note of caution, however. "The growth in Belfast in part is because of more visitors from the South and the UK, as well as the provinces. But that may mean a falling off in business in the provinces."

Ron Greenwood, store manager for Boots the chemist, Belfast, thinks the phenomenon is pretty well spread across the North. "We expanded at the height of the Troubles," Mr Greenwood says, "and always felt there was big potential here." Boots opened in Ulster in 1965, and now has one of its largest stores situated in Belfast. Since 1985 it has expanded rapidly and now boasts 27 chemists and six Boots opticians.

Business since the ceasefire is up strongly, especially in Belfast and Londonderry. And Boots stores across the province are doing better now, he says.

Property prices are also surging. Indeed, the North is the only part of the UK to have largely escaped negative equity, falling house prices, and the consequences. Tourism also has a good story to tell. The decision to visit as a holidaymaker is quicker to make than weighing up an investment proposal.

Elsewhere, the signals are less clear-cut. The CBI says Ulster has yet to see a wave of new foreign investment as a result of the peace. Some positive trends were already in place before the ceasefire. "There has been a general growth in confidence," says Ms Stewart, "but the tangibles of the peace have not come through as quickly as perhaps was hoped."

The Industrial Development Board, which promotes inward investment into the North, says it is harder to obtain a definitive picture of where the North stands after the peace. Inquiries from prospective foreign investors are up three-fold since August. But inward investment operates on an altogether longer timescale, says Michael Roberts, deputy director of international operations at the IDB.

President Bill Clinton's recent investment initiative boosted credibility, and the IDB is still reaping its benefits. Firm takers, however, have been harder to come by. And eliminating the violence has only dragged the region level with others in Europe. Nevertheless, Mr Roberts says, there are at least two prospects he feels are close to confirming substantial investments, a shift which can be attributed directly to the peace effect. He is confident there will be more in the months ahead.