Retail sector to shed 20% of staff

AS many as 10,000 people working in wholesale and retail will lose their jobs in the second half of this year, resulting in almost 20% of retail sector workers being laid off over a two-year period.

Economist Jim Power said that by June of this year 24,700 retail sector workers were laid off and he said that he expects this will continue until the end of the year when a further 10,000 redundancies will be recorded in this area of the economy.

The latest figures from the Central Statistics Office show that the value of retail sales has fallen by 4.8% in the 12 months to the end of June when car sales are excluded.

In the year to the end of July 114 retail companies were declared insolvent – an increase of 10% on the same period in 2009.

Retail failures accounted for 12.4% of all insolvencies so far in 2010, but the construction sector fared worse, with 277 closures this year, representing 30% of the 917 companies that went to the wall.

“I don’t see a recovery anytime soon,” said Mr Power.

“Retailers have cut costs wherever they can and as sales continue to fall they will revisit payroll costs and more and more jobs will be lost,”

And yesterday the country’s retail news agents said “farcical bureaucracy, mounting stealth charges and misdirected policies are strangling” the sector.

Vice-president of the National Federation of Retail Newsagents in Ireland (NFRN) Joe Sweeney, who runs his own shop in Donaghmede, said that at a time when the Government should be supporting local shopkeepers who are trying to retain jobs through a recession, it is instead supporting a range of state agencies and local authorities as they turn the screw on small retail businesses.

Mr Sweeney estimates that compliance with the regulatory burden imposed by state agencies now costs the sector €26.5 million per annum, with most shop-owners spending the equivalent of a 50-hour week each year on form-filling and box-ticking.

He said the current situation is farcical with:

* Separate Department of Agriculture inspectors visiting shops to check on potato sizes and egg dating;

* The Office of Tobacco Control using teenage researchers to trap shopkeepers into selling cigarettes to them while ignoring the huge illicit trade in every market and town in the country;

* Shopkeepers now needing up to 21 separate licences for retailing various products from small batteries to lottery tickets.

“The ability of retailers to continue in business is already being severely tested by recession and the sharp drop in consumer spending,” said Mr Sweeney.

“This is being enormously aggravated by enforced compliance with a wide range of disjointed Government measures piled piecemeal onto the sector.

“Despite repeated Government and EU-level promises to cut back regulatory and administrative compliance costs to small business, the problem continues to worsen,” he added.

“Some joined-up thinking is badly needed.”