The Association warned that retailers are still being forced to discount heavily due to reduced margins and the increase in e-tailing and this is hindering growth and job creation.
Subdued retail sales figures for December show an annual increase of 6.3% in volume and 3.5% in value. When motor sales are excluded volume was up 5.9% and value was up 3% in the year. The monthly figures show a decrease of 0.7% in volume and 0.8% in value in the month, confirming the continuing squeeze on margins.
Commenting, ISME Chief Executive, Mark Fielding stated, “The recent Budget did little specifically for the Retail trade. The 6% increase in the National Minimum Wage will further increase their cost base and act as a disincentive to new jobs. Despite the assurances on repercussive claims, the fact is that any increase in the minimum wage will have a knock-on effect and put increasing pressure on employers. This increased pressure on margins is making it very difficult for small local shops to succeed. Is it any wonder that our town centres are becoming ghost towns, with trading conditions such as these?”
“Consumer spending habits have changed with many preferring to source bargains from multi-national e-tailers instead of shopping locally. High costs mean that our indigenous businesses just cannot compete with these heavily discounted prices.”
“Government must re-double its efforts in retail training supports and the adoption of retail e-commerce solutions. The Association is calling for an increase in scope of the Online Trading Voucher scheme. The world of e-tailing is becoming vitally important to retail businesses in particular, and most Irish retailers are now already behind the curve when it comes to establishing an online presence. However, no amount of vouchers will compensate for the third world broadband infrastructure across the country, which must be a priority.”
The Association called for:
An increase to five thousand retail on-line vouchers for all SMEs.
A fast-tracking of broadband to all areas.
Government action on commercial rates, unrealistic rents and uncompetitive labour costs.
Bank credit availability for SMEs.
Revitalise the Action Plan for Jobs through direct cash incentives for additional jobs created.
“Retail is a changing industry with customers often never setting foot in a shop to make purchases. Government must help retailers to adapt to this changing environment and stop making the situation more difficult by imposing unrealistic costs on them,” concluded Fielding.