Retail crisis is ‘far from over’, industry groups warn
The crisis that has engulfed retailers since the onset of the Covid-19 downturn is “far from over” and more government support will be needed to prop up the sector, an industry body has warned.
The grim prognosis, from the Ibec-affiliated Retail Ireland, comes despite latest CSO retail sales figures painting a seemingly healthier picture.
The figures show retail sales volumes grew by 1.5% in July, compared to June as shops continued to emerge from lockdown. Compared to July of 2019, sales volumes were up by 6.4%.
In value terms, July saw a 3.6% rise versus June and a 4.5% year-on-year improvement. However, that annualised rise was only 2.3% when motor sales are excluded. Without motor trades, last month’s year-on-year sales volume growth was 5.9%.
Pubs able to serve food, and clothing and electrical goods retailers had a good July; but the likes of bars and department stores are still below where they were sales-wise before Covid hit Ireland in March.
Retail Ireland director Arnold Dillon said that while some parts of the retail sector have bounced back, the headline figures don’t capture the full picture nor the serious pressure many businesses remain under.
“City and town centre businesses are struggling because so many office workers are working from home. Footfall has dropped by as much as 50% in key retail districts and the cost base of many businesses is now way out of line with the trading reality,” he said.
"The planned Vat reduction is very welcome. Many businesses under pressure will need to use this revenue to protect jobs. The crisis for many retailers is far from over,” Mr Dillon said.
Fellow representative group Retail Excellence has written to the junior minister for employment affairs and retail, Damien English, looking for direct government help for retailers struggling to pay commercial rents.
“Sales across the retail sector in the first half of this year were down 30% with non-essential retailers closed for three months. City centres and shopping centres have been particularly badly affected, whilst we have seen a slight recovery during the summer, the outlook for the rest of this year remains bleak,” said Retail Excellence managing director Duncan Graham.
“We are calling on the Government to issue a code of practice and introduce an arbitration service to help with a speedy resolution of disputes between retailers and landlords. We are also calling on commercial landlords to engage with retailers and move to a payment model based on paying a percentage of turnover whilst we remain in these uncertain times. Failure to address these points urgently will result in further store closures and job losses in an industry that has already been decimated by Covid-19,” he said.
Earlier this month, Retail Excellence said 100,000 of Ireland’s approximately 300,000 retail jobs could go in a worst-case scenario for the sector.