36|Retail News|October 2020|www.retailnews.ie
Retail Ireland: Monthly Update
UNCERTAIN END TO THE YEAR LIES AHEAD FOR RETAIL
TO say that the next months to the end of the year are vital to the sustainable recovery of the retail sector would be an understatement. After the summer that has been, we have seen some evidence of a rebound in certain sections of the sector. In September, Retail Ireland published our newly redesigned retail monitor and some of the findings have made for stark reading. We have seen from our research that inflation rates have seen their sharpest drop since 2010, where prices were 1% lower in August 2020 than they were in 2019. While this is good news for the consumer, retailers will struggle to make up revenue that has been lost during the first spring lockdown period. While prices are remaining low, this has not been translated directly into retail sales. We have seen a marked decrease across many categories in the sector, including more high-end categories such as department stores, which rely in large part on the tourist and office worker trade in urban centres. While there has been some good news in certain categories, such as grocery and food, which has seen growth in value terms of 9.3% in comparison to last year and an increase of 10% by volume, it has been reported by our members that this growth is by and large confined to out of town suburban areas. Rolling area lockdowns One of the ongoing challenges that retailers will face in the coming months is the uncertainty around rolling area lockdowns. It is clear from the data that when the initial lockdown in spring was lifted, there was an uplift in consumer confidence from a low of the mid 40s in April to 62.6 in July. We are now seeing a dip in the index again as the media becomes saturated with talks around a second wave of the virus and Level 3 lockdown conditions were reimposed on Dublin and Donegal, followed by the entire country on October 5. The consumer sentiment index stood at 59.9 in August and we expect this to dip further, pointing to challenging trading conditions ahead.
Retail Ireland and our members have continued to keep channels of communications open with Government throughout this period and have stressed at every opportunity the need for clear and concise communications around any proposed lockdowns. What we have seen recently in Dublin, where the city and county was placed into a Level 3 situation with very little prior notice to business, is something we do not want to see replicated. While this caused particular distress to the hospitality and restaurant sector, retail faces some restrictions under Level 4 and above. We have stressed to Government that sufficient notice needs to be given to retailers to prepare in any situation where lockdown restrictions are being imposed on them. Meeting with Ministers In our recent outreach with Government, we met with Minister for Finance, Paschal Donohue TD and Minister for Public Expenditure and Reform, Michael McGrath TD, to discuss or priorities in advance of Budget 2021. One of the main thrusts of our position was that the National Economic Plan must extend liquidity and employment supports beyond the current timeframe. We stated that the Employment Wage Subsidy Scheme (EWSS) should be extended and made more flexible. Many businesses trading between 70-90% of normal business are not viable at that level, but do not qualify for supports. We also raised the point that there is major issue with time lags when the EWSS is paid and in some cases, this can be up six days, leading to major cash flow issues in businesses. We were happy that the Ministers were keen to give our positions a fair hearing and were open to further discussions on how to support the retail sector in this difficult time ahead. Retail Ireland’s new economic monitor will be published on a monthly basis and will contain many unique insights into current economic trends. It can be viewed at https://www. ibec.ie/connect-and-learn/industries/retail-and-tourism/ retail-ireland or contact us for further details.
Tel: 01-6051558 www.retailireland.ie Need more? For more information about what we do and how your retail business can benefit from our unique services and supports, please visit us at www.retailireland.ie.
