Conversations with local businesses here in the city and in towns around the county have conveyed to me a growing level of frustration and negativity about the future of retail.
A selection of businesses, mostly long established have told the Advertiser that they are seriously considering their options regarding staffing, opening hours and in some cases, about whether to continue at all.
This is bolstered by Retail Excellence, the largest retail representative body in Ireland which too has expressed serious concerns about the urgent challenges faced by retailers due to the increasing costs of doing business within the sector.
Its latest survey, which includes the views of 128 retail companies representing approximately 3000 stores, from SMEs to some of Ireland’s corporate giants, reveals a strategic response to these financial pressures. Nearly half of retailers surveyed are considering a reduction in operational hours, while another 35% are faced with the prospect of price increases as a means to balance the scales.
They told the Advertiser that there has been an avalanche of new policy measures that are putting pressure on business costs, the most notable adjustment of the national minimum wage has introduced some major challenges for retailers, balancing the commendable goal of ensuring a fair standard of living for employees with the practical financial capabilities of businesses, particularly small and medium-sized enterprises (SMEs ), which will struggle to shoulder these costs without adverse effects. The last 4 years has seen a 30% increase in the minimum wage.
70% of retailers surveyed were in favour of a national living wage provided the costs of doing so were offset elsewhere and businesses were not expected to shoulder these costs alone.
There was also a 70% increase in sick pay utilisation amongst the retailers surveyed with reports indicating a trend of some employees treating the additional paid sick leave akin to extra holidays.
With auto-enrolment for pensions on the horizon, the initiation of repayments for the Revenue Debt Warehousing Scheme, the Deposit Return Scheme and the new EU directive on 30-day payment terms looming in 2024, it is set to test the industry.
The potential for operational efficiencies, cost reductions, and, in some cases, employee redundancies loom large, given that an alarming 48% of surveyed retailers don’t have the bandwidth to accommodate these mounting costs.
The organization is advocating for fixed policy decisions, particularly in PRSI and VAT adjustments, to provide much-needed certainty and support for the retail sector. REI stresses that while the Government’s Cost of Doing Business Grant is a support measure, it is only a starting point in addressing the sector’s woes.
“This avalanche of costs & policy changes has been overwhelming for retailers” added CEO Jean McCabe “The need for a sustainable business model that protects jobs and supports businesses is crucial. The current trajectory is untenable & the industry needs to be supported before we start to see a wave of store closures,” emphasised Ms McCabe.
