Sterling collapse to put pressure on “fragile” retail sector, warns IBEC
A string of external pressures has the potential to derail the retail sector’s fragile recovery in the run up to Christmas, according to IBEC’s Retail Ireland group.
Speaking at their annual conference in the Guinness Storehouse, the group has warned of the immediate concerns caused by the Sterling collapse, which risks driving customers north of the border and online.
Retail Ireland has called for Tuesday’s Budget to address the challenges of Brexit head on and support growth. It urges a reduction in “punitive tax burden” on consumers to support the domestic recovery and highlighted the importance of avoiding measures that will add to already high business costs.
Their proposed measures also include keeping labour costs competitive and establishing a Town Centre Fund to support the regeneration/development of towns and cities across the country.
Addressing delegates at the conference, Retail Ireland Director Thomas Burke said: “The retail sector is only getting back on its feet following the crisis years. Total employment in the economy is 10% higher than it was four years ago, but retail employment is only 2% higher. This emerging recovery is now vulnerable.
“Despite intense retail competition and falling prices, Brexit has unnerved consumers and currency pressures risk sending shoppers north of the border or online. Retailers are doing everything within their power to facedown the challenge and ensure prices stay low, but the government has a crucial role to play.”
Burke also highlighted the impact that intense online competition is having on retailers in his address.
He adds: “Online retail is an increasingly important channel, with over 50% of Irish consumers having made an online purchase in the past 12 months. In 2015 the total value of online purchases by Irish consumers was €9.1 billion, with clothes, sporting goods and books the most popular items purchases.
“The Irish online retail offering has improved significantly over recent years on foot of major investment. Despite this, over 70% of total online sales revenue leaves the State. The emergence of other sales platforms in recent years such as click and collect and home delivery has greatly increased convenience for consumer, but has proven logistically and financially challenging for Irish retailers. Investment in these platforms has not been easy with margins tight and capital investment opportunities constrained by limited credit availability. The sector is now firmly focused on this challenge.”
