Some positives, but retail remains vulnerable - RI

Tuesday, 11 October 2016
Retail Ireland, the Ibec group that represents the retail sector, today welcomed elements of Budget 2017 that will increase disposable income and support consumer spending, but said more could have been done to support retailers under pressures from a high cost base and acute currency pressures. The new Town Centre Regeneration Fund is timely and very welcome, but the failure to tackle business costs and deliver e-commerce supports was a lost opportunity.

Retail Ireland Director Thomas Burke said: "The sterling drop has intensified the pressure on retailers from competitors in Northern Ireland and UK-based online retailers. Retailers had hoped for a more comprehensive response in today's budget. Over the coming weeks new measures will be required to support the competitiveness of Irish businesses most exposed to Brexit pressures.

Retail Ireland expressed disappointment at the move to further increase the National Minimum Wage following a 50 cent (6%) increase in January of this year. "This latest increase will further increase the disparity in employment costs between retailers in the Republic and those in Northern Ireland where the minimum wage is now 13% lower. Given the recommendation from the Low Pay Commission to further increase the National Minimum Wage, we had hoped Government would introduce measures to offset the increase in associated employment costs such as reducing employers PRSI to its previous 4.25% level. It is disappointing that they have decided against this," said Mr Burke.

Retail Ireland welcomed the introduction of a town centre regeneration fund, which it is hoped will help reinvigorate towns still bearing the scars from years of trading decline and recession. "The move to allocate specific funding to address the deep challenges many of our towns face is very welcome. These funds will allow for the development of much needed initiatives that will attract both consumers and commercial interests back to town centres," said Mr Burke.

Retail Ireland finally expressed disappointment at the Government's decision not to introduce measures to incentivise the migration of Irish retailers into the ecommerce channel, through a proposed tax credit which would have helped Irish retailers and the Exchequer take a greater share of the increasing volume of online retail trade. "This is a measure which we will continue to pursue with Government over the coming months. The online space is one of great opportunity for Irish retailers and there is a significant win for the exchequer also should we manage to retain some of the 70% of trade which currently leaves Ireland to foreign based websites," he said.