Retailers in Ireland are planning a major injection of investment in people, skills, store refurbishments, and technology to address the competitive threats facing the industry from global online trading and Brexit.
This is according to a report, titled ‘Shaping the Future of Irish Retail – a strategy for Irish retail 2017-2020’, written by Retail Ireland, the Ibec group that represents the sector.
The report incorporates the views and sentiments from stakeholders across the entire retail ecosystem including retailers, policy makers, employee representatives and consumers groups.
Report highlights include:
- Retail is a critical sector in the Irish economy and the country’s biggest private sector employer (employing 280,000 people) and that the coordinated efforts of all stakeholders will be required if the sector’s competitiveness is to be safeguarded in the years ahead.
- The retail sector still lags behind the recovery seen in many other sectors of the economy, and the value of retail sales remains 13% below pre-crisis levels.
- The sector is facing significant new competitive challenges and Brexit is already impacting on the performance of Irish retail businesses.
- Due to this structural shift, growth in retail sales between 2017 and 2020 is likely to average 1.2% to 2.2% per annum, mostly driven by population growth. At the same time, growth in employment in retail is likely to be incremental in the coming years.
- Notwithstanding this, and despite a considerable softening of sentiment since the Brexit vote, Irish retailers remain optimistic about the future, with the vast majority having ambitions to increase capital investment and expand their businesses in the next three years.
Launching the report this week, Thomas Burke, Director of Retail Ireland stated: “Few sectors were as hard hit by the economic collapse and subsequent recession in Ireland, which saw sales hit hard and over 40,000 jobs lost. While the sector has enjoyed a sustained recovery it continues to undergo rapid change, structural transformation and growing economic uncertainty. It will be critical to support the sector’s competitiveness, ability to grow, sustain jobs and deliver value to Irish consumers in the coming years. The strategy we’ve launched today provides a blue print to deliver on this.
“For the first time, we have collaborated with all of our stakeholders across policy, consumer, employee, and retail groups to create a vision for the industry that will enable us to become a thriving, world leading sector by 2020.”
At the launch, Retail Ireland called on more support from Government as a matter of urgency in order to support the sector to realise these ambitions. These include:
- Centralise Government support for the retail sector
- Introduce a tax credit to support Irish retailers to compete with international online retailers
- Grow consumer disposable income
- Reduce the cost of regulatory compliance
- Increased support for retail training and education programmes
- Regenerate Ireland’s high streets
Conor Whelan, Chairman of Retail Ireland and Managing Director of Eason Group said that the sector is undergoing an unprecedented structural shift at present. He commented: “The results of our report show that despite a considerable softening of sentiment since the Brexit vote, Irish retailers remain optimistic about the future, with the majority having ambitions to develop, invest in and expand their businesses in the next three years. In fact, 85% of retailers surveyed said they intend to invest in people and careers in the next three to five years and 92% are planning to invest in new technology and refurbishment.
“Irish retailers are showing a great degree of adaptability in response to shifting consumer demand, and are transitioning towards an ‘omni-channel’ offering for shoppers, by embracing new technologies and building new in-store experiences. This will be critical for them in the coming years as increasing number of Irish people shop online and up to 75% of line transactions go to foreign websites, which negatively impacts Irish jobs, businesses and the State’s tax revenue.”