Ibec: Post-Brexit tax cuts needed

Retail Ireland has called on the Government to deliver a budget of tax cuts and spending increases to ward off the “chill winds” caused by Brexit.

The Ibec retail representative group said greater “consumer unease” is now evident due to sterling’s post-referendum decline.

Months of strong growth has been brought to an abrupt end by the UK’s referendum result, with the onus falling on the Government to help hard-pressed business owners, Retail Ireland director Thomas Burke said.

“Ireland is uniquely exposed to Brexit’s chill winds. Consumer confidence has fallen back, after months of strong growth, and retailers say positive momentum has slowed in recent weeks.

“Sterling’s sharp fall has intensified competition from Northern Ireland and UK online retailers. While domestic retailers are moving quickly to adapt to the new environment, the Government must also take decisive steps in Budget 2017,” said Mr Burke.

Apart from reducing Ireland’s marginal tax rate, Retail Ireland is seeking the establishment of a town centre fund to aid with the regeneration of towns and cities. It is also opposing increases to the national minimum wage.

Key initial results from Brexit survey of 450 firms. Only 1/4 have pricing agreed or hedging. Most very short term pic.twitter.com/x9T56lMVDz

— Gerard Brady (@GerardBrady100) August 2, 2016

Mr Burke was speaking as the body’s latest retail monitor was published.

The value of sales in the fashion and footwear sectors saw the largest monthly decline (4.2%), followed by department stores (1.8%) and pharmacies (1.6%).

While most sectors were hit by a drop-off between May and June, the value of goods sold in all sectors except fuel increased on an annual basis.

Comparing Q2 2016 with Q2 2015 reveals a similar story with fuel sales the only sector covered by the monitor showing a decline.

Mr Burke said that while the ramifications of the Brexit vote are still being determined, the uncertainty it has caused is unhelpful to Irish retailers.

“It remains too early to gauge the long term impact... and to judge whether it has caused any real slowdown in the local and global economy.

"While Brexit is less likely to threaten Irish consumer confidence than British sentiment, any uncertainty is in itself bad news for a retail sector at this delicate point in its recovery,” Mr Burke said.