Retailers ‘are not expecting growth until mid next year’

RETAILERS don’t expect the economy to grow again until the second quarter of 2011, according to an ADM Londis survey.

Some 96% of retailer members attending the Londis group’s 2010 Annual Retailer Conference said consumers are purchasing a higher percentage of grocery shopping than in the past. They put this down to intense competition in the marketplace. In response, they point to the need to increase the value offering of promotional and private label products.

ADM Londis chief executive Stephen O’Riordan said: “Almost 90% of retailers believe that it will be the second quarter of 2011 and beyond before the Irish economy returns to growth. In a retail industry where the fall in value of overall retail sales in Ireland is estimated to be in excess of 20% since market peak, it is essential that the Government addresses the needs of small business by abolishing inflationary JLCs, reducing local authority charges and purging the excessive amounts of ‘red tape’ and regulations imposed on independent retailers.”

Mr O’Riordan’s views echoed his members’ calls for government action on wage costs and local authority charges. Some 62% of grocery retailers detailed intense competition as their biggest challenge, followed by customer retention, cash flow management and additional cost reduction.

Almost two-thirds of Londis retailers called for the abolition of the Joint Labour Committee mechanism for fixing wages in the grocery sector. They said that the existing JLC system raises retail wage rates by up to 25% higher than the national minimum wage.

Over 300 delegates from Londis stores attended the conference in Galway.

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