Call for rent relief for retailers

MANY of the country’s retailers are on a “knife edge” as shoppers keep their money in their pockets and sales continue to plunge.

This is according to representative group, Retail Excellence Ireland (REI) which is calling for a relief for retailers from their rents.

REI said that Fine Gael committed in its pre-election manifesto to passing legislation giving all tenants the right to have their commercial rents reviewed in 2011, irrespective of any upward-only review clauses.

REI chief executive David Fitzsimons said the organisation expects progress on rent clauses which have “crippled retailers” in the midst of this economic crisis.

“Retailers must be enabled to get relief from their current rents and upward-only rent clauses must be abolished,” he said.

“All we want is a level playing field and rents that are based on real market conditions. We welcome Minister Shatter’s commitment to introduce this legislation which must be capable of unravelling the 240% increase that was inflicted on tenants from 2000 to 2007 when consumer prices only increased by 30% during the same period and have fallen back by 30% since.

“It is likely that already fragile consumer sentiment will be further affected by budget adjustments towards the year end with a continuing impact on the retail industry. Thousands of jobs hinge on the crucial measures required to create a level playing pitch for retailers through this legislation.”

Overall, year-on-year retail sales levels fell by an average of 6% during the second quarter of 2011, increasing from a rate of decline of 3% in the first quarter, according to REI.

It said legislation due in Autumn is expected to enable stressed tenants to challenge “exorbitant commercial rents”.

Upward-only rent reviews are soon to be banned by the Government in a bid to stop the haemorrhaging of retail jobs.

Chief economist with Bloxham Alan McQuaid said with not much scope for a significant drop in the savings rate, consumer spending in 2011 is likely to maintain the downward trend of recent years.

“All in all, personal spending on goods and services is expected to fall in real terms for the fourth year running in 2011. As regards July, headline sales are forecast to have decreased over 1% in volume on an annual basis,” he said.