Business leaders in Galway are still optimistic of a recovery in the retail sector this year – following a “terrible” four years which saw a collapse in consumer confidence, job losses and business closures.

A local Chamber of Commerce official said there is a lot of pent-up demand amongst consumers, and the ‘dam will burst’ soon.

And despite the two per cent rise in the higher rate of VAT on January 1, the festive sales period was “better than expected”, with shoppers buying more expensive goods before December 31.

Michael Coyle, Chief Executive of Galway Chamber of Commerce told the Connacht Tribune: “There are more positive signals out there at the moment than this time last year.

“Traditionally, January, February and March is a very difficult period for traders. But we’re not hearing of an exodus to the North or other jurisdictions as a result of the VAT increase.

“I was very fearful coming into the Christmas period, because of negative commentary in the media about the survival of the euro, and the fact that it would be the fourth Christmas in a row against a very challenging economic backdrop,” he said.

The ray of light comes following several years of challenging trading for businesses across the board – which has seen hundreds of small business closures in Galway.

Mr Coyle said he is convinced that there is plenty of latent consumer demand.

“Christmas turned out to be marginally better than expected and I’m sensing optimism out there now. We’re not almost into the fifth year [of the economic downturn]. It’s inevitable that there’s pent-up demand. Ultimately, the car is going to need to be changed, the extension will have to be built, a new suit will have to be bought."

See full story in this week's Connacht Tribune.