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WILL the Government’s trickle-down economics plan have run dry by the time it reaches shop doors? That’s the question on retailer minds in the run-up to Budget 2024. According to the Summer Economic Statement, Finance Minister Michael McGrath TD intends to increase spending by 6.1% next year. This measure, remarks McGrath, "will allow the Government to provide the level of investment we believe is necessary to maintain public services and protect incomes, without adding unduly to inflationary pressures”.

Retail News spoke to a number of retail representatives and supermarket CEOs who welcome the Minister’s approach to a

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big picture economy. Arnold Dillon, Director of Retail Ireland, noted that “capacity and bottleneck issues around the supply of housing, childcare, the provision of public transport and transport networks” may be improved by increased investment and “deliver sustainable growth over the medium-term horizon”.

But can the Government’s big picture promises be “introduced in a way that doesn't add to the cost of small businesses?” wondered Tara Buckley, RGDATA Director General.

Chief among retailer concerns, in the approach to Budget 2024, are labour cost increases. These, according to John Moane, Chief Commercial Officer, BWG Foods, are “driven by a multitude of factors that includes an almost certain significant increase in the minimum wage and the planned commencement of auto-enrolment in 2024. This is in addition to various other recently introduced legislative requirements for employers, such as Statutory Sick Pay, which together have created an impossibly complex compliance environment.”

By 2026, the minimum wage is set to morph into a living wage. Furthermore, notes Vincent Jennings, CEO of CSNA, “the potential for changing the sub-minimum rates for people under the age of 20, are going to affect enormously that element of our costs”.

John Moane argues that combined, “these new measures are forecast to add over 20% to the cost of employment, which already represents the single biggest cost for doing business as an independent retailer - and this is without consideration for the longer-term impact. Precedence shows that an increase in minimum pay drives wage inflation at all levels, meaning the cost of business will increase throughout the wider supply chain over time.”

What solutions might be reached in the October budget? CSNA has called for the