It's all-out war in the CD sales arena and Swords in north Co Dublin is the latest battlefield. Music retail giant HMV opened a new branch in the Pavilions Shopping Centre in the town yesterday, displaying a confidence that might seem cavalier in the age of MP3 downloads and internet CD sales.

HMV opened its first branch in London's Oxford Street 80 years ago, but the old dog has had to learn some new tricks in order to beat the young pups on the Web. With sites like Amazon and CDNow biting into high-street CD sales, and free music downloads diminishing the demand for store-bought product, established retailers like HMV, Virgin Megastore and Tower have had to fight back and give their customers a reason to log off the Net and jog down to their local record store.

It's nipper versus Napster, but don't place your bets just yet for it looks like the old dog hasn't yet had its day.

Mr Gennaro Castaldo is head of press and PR for HMV (UK and Ireland), so it's his job to be upbeat and positive about the future of retail music sales.

There is, however, some evidence to back up Mr Castaldo's optimism.

HMV Media Group's financial results for the year to the end of April 2001 show a 12.5 per cent increase in sales to £1.54 billion sterling (€2.5 billion), giving HMV a 20 per cent share of all British music sales.

With the opening of its new Swords outlet, the company is hoping to get its teeth even deeper into the Irish retail music market. HMV has been trading in the Republic for 15 years, and the Swords store is its seventh outlet, offering nearly 10,000 rock, pop and specialty titles in 3,000 square feet of retail space.

"Record stores are still central to the way people buy music and we don't see that changing in the near future," says Mr Castaldo. "People still come for the social aspect of shopping and there's an emotional link with the product.

"People still want to hold an actual CD in their hands, look at the cover, take it home and put it on their stereo.

"Downloading music will appeal to some people but for others it's a sterile medium. It's a functional approach rather than an aesthetic pleasure."

HMV, however, hasn't become complacent about the Net threat. Mr Castaldo says that to drag people away from their mouse mats and into their premises, record stores must create a vibrant in-store environment, and they have to use internet technology to their advantage.

All the major music retailers have websites through which customers can make all their CD purchases but, according to Mr Castaldo, internet sales only account for around 5 per cent of HMV's turnover.

That suggests that more than 90 per cent of music lovers are still popping down to their local CD emporium and browsing through the actual products.

Far from swallowing up retail music, says Mr Castaldo, the internet is fuelling it, stoking up increased interest in new CDs, classic albums and specialist compilations.

"We want to let the public decide how they want to access their music, whether they want to download it, purchase it on CD or even get it on vinyl," says Mr Castaldo.

To that end, HMV is planning to introduce a CD-burning service, where customers choose their own selection from a databank of MP3 files, thus paying only for the songs they want to hear. This "virtual music store" is already in place at HMV's Oxford Street branch and will be expanded to other stores - provided there is a demand.

"At the moment, we're trying to understand shoppers' instincts and react to that," says Mr Castaldo. "There's no point in trying to get ahead of them. It's important to lead but it's also important to know what people want. The public still has a keen appetite for buying music.

"The internet has its place but, for the foreseeable future, it looks as if retail sales will still be the major force."

DVD has proved a successful weapon in the ongoing battle of cyberspace, providing a consumer-friendly format that has boosted sales of digital music and movies.

The success of Playstation and its array of games has also given retailers a solid, saleable product, while a resurgent interest in vinyl has brought DJs and collectors flocking to record shops.

And, while consumer advocates have long challenged the inflated price of CDs, shoppers seem more willing than ever to fork out for those shiny little five-inch discs.

"Instead of resisting change, we have to be part of the process of change," says Mr Castaldo.

"We wouldn't be investing in Swords if we didn't think the market was still there. We're optimistic that nipper will prevail over Napster."