I was in London recently with my two teenagers and had to visit the obligatory A&F store to ensure they are fitted out with the 'right' gear. I generally shop in Ireland but A&F are not here yet!

Hannah Kiely.

As a female entering the store, I could have had a coronary. I was met by not one, but four, toned, tanned, muscular, six-packs (I know this as they were stripped to the 'perfect' waist) young men who greeted me with a bright white perfect smile. Everywhere I went in the complex dark sultry building, there were more of these males, quite disconcerting. I think not! I queued to get in, queued to get served, listened to the loudest music possible along with hundreds of people; there was not a sign of a recession in sight. Perhaps my vision was distracted!

Whilst in the queue, I noticed nearly everybody spent over £300 sterling at a minimum and yet retail sales are reported to be falling - certainly not at this store. This was like the Christmas sales. But further along Oxford Street and Regent Street, things certainly appeared much quieter than expected.

This fall-off is now certainly being reflected in the retail sales figures here in Ireland also. The most recent figures available are February and these show a drop of 1.9 per cent compared with January and 0.1 per cent year on year (yoy). This yoy fall was the first since January 2004. It is expected that March figures will follow this trend when released. New housing and overall consumer spending both contracted in the first quarter. As a result, economic activity declined for a second straight quarter.

Car sales are the most obvious areas of weakness with three factors at play - expected changes to VRT, mistimed road tax increases and petrol price increases. The fall off in new housing impacts sectors like furniture which rose by only 0.2% and electrical goods which plunged 6.7 per cent. This is something we may have to get used to in the short term, but the resilience of the Irish Economy should see us through.

Meanwhile, I feel another trip to A&F coming on!

Hannah Kiely, HC Financial Services. 20 years serving your financial needs.

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