4|Retail News|June 2014|www.retailnews.ie
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Cautious Welcome for Retail Forum
A NEW retail forum is likely to influence decisions in the next budget, the Minister for Small Business told Retail News. According to Minister John Perry, retail is “paramount in the government’s mind” after the first meeting of the government’s Retail Consultation Forum. “I’m encouraged by recommendations from the forum. They will be beneficial in Budget 2015 in recognition of the retail sector,” said Perry. Retail representatives were encouraged by the Forum, which gave them the opportunity to provide feedback to various government departments. Some believe the Forum offers the opportunity to be a voice for retail in the corridors of power. Others are cautious in their appraisal of the initiative. “We’re all a bit wary of other types of forums we have been in that turned out to be white elephants,” said RGDATA Director General, Tara Buckley. Minister Perry insisted the forum is “no talking shop, as it’s driven by the Taoiseach himself”. Sceptical attendees are willing to give it a chance, though. “We have been waiting so long to get this,” said Mark Fielding, CEO of ISME. “It’s the first time the Government have decided to sit down and talk face to face with people who run shops and businesses.” Vincent Jennings, CEO of the CSNA, concurred: “I’m prepared to give it a chance. There’s no point in any of us wasting our time. We have to understand that being patient is important as well. We can’t afford
to be cynical. We have to engage. I’m prepared to give my time and commitment to ensure whatever comes from this is positive for retail.” The first meeting of the Retail Consultation Forum, which emerged from the 2014 Action Plan for Jobs, sported a wide attendance: Minister Perry was there, alongside Minister for Jobs, Enterprise and Innovation, Richard Bruton TD. There were numerous representatives from government departments and agencies, and a wide range of retail representatives. “A lot of senior civil servants were there,” said Buckley. “We were told they would bring the messages back to their departments and advise the government in terms of their strategy with regards to the budget.” “All the leading players were there,” said Minister Perry. “The consultation involved all the different departments. It was driven by the understanding that 10% of GDP, around €15 billion, depends on the retail sector. It employs 270,000 people.” The ministers left after an initial address, allowing Declan Hughes, head of the Enterprise and Trade Division at Forfás, to take the helm as Chairperson. “It was a prepared agenda by the Department of Enterprise, with a prepared list of topics, in order of their preference,” explained Fielding. “We agreed to change the preference to suit the retail trade rather than the departments.” Budget 2015 was at the top of the agenda. Reversion of the PRSI rate from 8.5% back to 4.25% was a concern
for all retail representatives. “Within the next budget, we would
John Perry TD, Minister of State for Small Business.
like to see signs that the Government understand the effects bringing back the high PRSI rates have had on job creation in our business,” Jennings told us. “It’s costing the smallest retailers up to €15,000 (per annum). It’s costing many of our mid-sized retailers €30,000.” Retail Excellence Ireland was vocal about job activation measures not working due to tax restrictions. “The doubling of the PRSI for low paid employees in the last Budget acted as a significant blockage to all the job activation schemes,” said David Fitzsimons, CEO. “The Government are either serious about jobs or they are not.” Frank Gleeson, Chairman of Retail Ireland, urged the Government to encourage consumer spending by easing the burden on tax-payers. Other issues included town centre shopping, local rates, and “municipal and administrative charges at local level.
Retail News|June 2014|www.retailnews.ie|5
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RGDATA Director General, Tara Buckley.
If you want to put a couple of chairs outside your shop, there are all these different costs,” said Fielding. Dealing with the black market was also discussed at the first meeting, as was below cost selling and e-commerce. The Forum plans to meet four times a year, allowing retailers to raise issues from planning policy, to tax policy and skills – that cut across government departments. Sub-groups of the Forum may meet more frequently. Representatives for the Department of Health were not in attendance, although they are expected to attend the next meeting in September. Vincent Jennings doubts this is a suitable platform to address the issue of tobacco plain packaging. However, he “would be keen for the Forum to have a view upon the attempt by the Department of Health to increase our costs by way of a licensing fee”. Some retailers we spoke to said that the Retail Consultation Forum is a
Vincent Jennings, CEO, Convenience Stores & Newsagents Association.
significant initiative for the trade, which is often marginalised at policy level. “Retail has been the forgotten sector,” said Buckley. “There’s a lot of focus on fiscal issues, employment incentives, exports, manufacturing, and very little focus on retail. Often, legislation is introduced in a way that suits manufacturing or exports.” Frank Gleeson agreed: “We are a little bit forgotten about. Part of that is our fault. We have not been strong enough in our lobbying as an industry. We need to be listened to. Government concentrated on exports and banks.
September. If they haven’t addressed the issues by then, in terms of influencing the various departments where they are preparing budget submissions, they will be too late.” Minister Perry told us
ISME CEO, Mark Fielding.
David Fitzsimons, CEO, Retail Excellence Ireland.
that civil servants will be working during August toward Budget 2015, keeping him abreast of the situation.
“I don’t want to say it’s a failure before it has even started, but I hope a couple of key issues around retail – the PRSI and retaining the 9%VAT rate – will be dealt with,” said Fitzsimons. “I hope the Government will show some innovation around interventions to stimulate growth. Let’s wait and see. We’ve been calling for a Minister for Retail, but this is the next best thing.”
Government Not Doing Enough: Retail Index Frank Gleeson, Chairman, Retail Ireland.
Now they need to focus on domestic. Before, during and after the Forum, I spoke to a few of the senior civil servants. I think there’s a real willingness to work together. I haven’t seen that before. It’s probably because retailers are not as organised or as collaborative as other groups. “When I talk to the people who represent the different cohorts of retail – David Fitzsimons, Vincent Jennings, Tara Buckley –we have more in common than anything else,” he added. “We fight for our own groups, but when we pull together we’re way more powerful.” Budget 2015 will be a barometer of the Forum’s success, believes Buckley: “Have they listened? They were well received by the chairperson. Are they going to be communicated back into the departments? The next meaning will be in
IRELAND’S retailers remain upbeat on the future but the overwhelming majority say the Government at local and national level is not doing enough to support the retail economy. Despite this, the majority are seeking growth and 55% of retailers have made a large investment in their business in the past three years. These are among the key findings in the new One4all Retail Index, which tracks the views of retailers across Ireland, published to launch One4all Shoppers Week, which encourages consumers to spend the estimated €25 million of One4all Gift Cards currently in circulation. 72% of retailers who participated in the One4all Retail Index said that the current retail environment is very good to neutral and 38% say that consumer spending has increased in the past 12 months. A further 28% say spending is holding steady but 32% have decreased prices in order to keep customers. However, price competition remains tight and 56% are also offering more discounts and promotions in-store compared to 12 months ago. The research, commissioned by One4all, also finds that aside from the general competition and the economy, cashflow and liquidity are the biggest challenges they face. However, bankers and politicians are not to blame for the recession, as just 14% of retailers blame bankers and only 6% blamed politicians. Instead, poor regulation comes out as the single biggest cause of the recession, with more than one in five retailers blaming poor regulation. “Retailers, like most businesses, have faced a really challenging time over the past few years,” commented One4all Group CEO, Michael Dawson. “Despite this, they have invested in their business and many are already experiencing growth, with over 30% increasing the numbers employed in the past 12 months and almost 50% maintaining employment levels. However, there is now an urgent need, as shown by our research findings, for Government at local and national level to reciprocate and support this vital part of our economy.”