Retail Ireland, a representative group for the Irish retail sector, has said that the government's 2019 Budget announcement represents a 'mixed bag' for the retail sector, and will do little to improve the sector's competitive position.
Commenting on the Budget announcement, which took place on Tuesday, Thomas Burke, the director of Retail Ireland, said, "The Irish retail sector has come under increasing pressure from rapidly rising input costs in areas such as rent, insurance and labour over recent months.
"This cost base challenge is likely to be exacerbated by Brexit and other geopolitical events over the coming months, as supply chain complexity and costs increase," added Burke.
He added that the Budget presented the Irish government with a "unique opportunity to protect a sector which employs over 295,000 people in every city, town and village across Ireland from these headwinds. Unfortunately, this opportunity has largely been missed."
National Minimum Wage Increase
Among the measures criticised by Retail Ireland was an increase in the national minimum wage, to €9.80, which marks a cumulative increase of more than 13% since 2015.
"This increase significantly outstrips the growth in the cost of living, which stands at roughly 1% per annum," Burke said, adding that the announcement "is further evidence of the role the state continues to play in driving business costs upwards and will only serve to further increase wage pressures for retailers at levels well above the national minimum wage rate."
At the same time, however, changes to the income tax regime were welcomed by Retail Ireland, with Burke saying that it will "reduce the burden on average income earners and put some money in the pockets of Irish consumers. It will also help retailers to attract and retain talent within their businesses."
Critical Period
Burke concluded by saying that this is a “critical period" for the retail industry, "caused by a perfect storm of pressures, including rising costs, e-commerce changing consumers' shopping patterns and Brexit.
"It is very disappointing that Budget 2019 hasn’t done more to protect the geographically and socially vital Irish retail sector, as we enter into what will be a very difficult trading period," he said.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
