Call for government support for retailers in fight against online giants

Retail Excellence Ireland has called for State support for retailers as it was revealed 60% of Irish online spending in 2017 went to foreign retailers.

Lorraine Higgins of Retail Excellence Ireland said the threat posed to Irish retailers by online operations overseas has been growing for more than a decade. The retail representative body is concerned that unless some level of State-intervention is implemented, many indigenous businesses that make the Republic’s retail space unique would shut.

According to Ms Higgins, “Consumers see a huge price differential between online and bricks and mortar shops, but many of the prices that we see online do not include VAT or duty and seem much cheaper. Around two-thirds of consumer spending is leaving the country every single day, and that presents a massive challenge to the retail industry and to Revenue.”

Less than 30 per cent of Irish retailers have an e-commerce capability on their websites, and 22 per cent have no online presence at all. According to Retail Excellence Ireland the numbers highlight the size of the challenge many retailers face if they are to survive, and she called for State support for small enterprises seeking to build websites to compete against overseas competitors. The calls came in the wake of the closure last month of a branch of the Walton’s music shop on Dublin’s South Great George’s Street.

Thomas Burke, director of Retail Ireland, the Ibec umbrella group for the industry was cautiously optimistic about the future, “I see it as a glass half full kind of situation. Shopping is not just the transaction, it is a past time and it is a social activity, and I think retailers need to take advantage of that fact they do not have to just go toe-to-toe with the big online retailers on price and can offer something a bit different.”

Retailers say €200m in local authority rates lost due to inefficient collection

Retailers have called for a complete reform of the system local authorities use to collect rates.

According to Retail Ireland, the Ibec group representing retailers, more than €200 million is lost each year in local authority rates that go uncollected. The group say that a lack of consistency and clarity in how the charges are applied and collected is impacting Irish retail competitiveness and negatively affecting town centre renewal.

The group today launched a new policy paper ‘Tackling the Rates Burden’ in which they say there are ‘serious deficiencies’ in the current system governing how local authority rates are levied and collected, resulting in over €200 million in uncollected rates each year.

According to the policy paper, under the current system retailers who operate on a nationwide basis have to deal with 31 local authorities, most of which have radically different ways of operating. This makes business planning on a national level difficult and deters investment.

Retailers are also calling for a disassociation between rents and rates. Retailer say that linking the two charges has led to many retailers paying disproportionate costs as a result of upward-only rent reviews becoming increasingly common.

Retail Ireland have proposed that local and national government make the following changes in policy-

  1. Introduce a centralised collection process
  2. Stop linking rents to rates
  3. Reform the revaluation system
  4. Progress on local government reform
  5. Increase local property tax intake

Retail Ireland Director Thomas Burke said: “Local authority rates make up a significant portion of total input costs for Irish retailers. The current system is opaque, inconsistent, inefficient and expensive to operate.”

Mr Burke also said ““Retailers have seen a significant increase in rates in recent years with very little return in terms of new service provision. This is of particular concern as retailers feel the pressure of rising costs across a range of other inputs such as labour, rent and utilities.”

 

 

Image courtesy of Chris Dlugosz via Flickr

 

Managing Director of BWG Foods Willie O’Byrne has been elected as the new chairman of Retail Ireland

Mr O’Byrne will serve a two-year term at the helm of the retail arm of Ibec. He replaces Conor Whelan, who recently stepped down as managing director of bookseller Eason. Maxol Group chief executive Brian Donaldson will serve as vice-chairman of the organisation.

At the announcement, Mr O’Byrne discussed the current landscape of the retail industry, including the challenges posed by the Brexit fallout and rising costs at home. “Retail is an exciting, dynamic and innovative industry and I look forward to working with the Retail Ireland team to ensure that the many issues facing the sector are fully recognised and addressed.”

“The industry is facing a number of challenges which we as an organisation must address immediately. These include the fallout from Brexit, which has already impacted upon consumer sentiment, with retail sales growth softening considerably in the months following the UK’s decision to leave the European Union” he said.

“We also must work with Government to address the rising costs Irish retailers face which – allied to the emerging threat from foreign online-only retailers – threaten to undermine the future sustainability of the sector.”

Retail Ireland has called on the Government to centralise its support for the retail sector and introduce a tax credit that would help Irish companies compete with international online retailers.

Retail Ireland works to represent the retail sector’s interests to Government, media and all other stakeholders, the body is affiliated to employers’ group Ibec.