Thousands of retailers ‘on the brink’ of collapse

Retail Excellence tell Oireachtas committee the sector will need continued grant aid

Many retail businesses “will not survive” without further Government support and more action being taken to tackle what is being viewed as a looming commercial rent crisis, an Oireachtas committee has heard.

Industry group Retail Excellence told the Oireachtas committee on enterprise, trade and employment that more grant aid is needed for the sector, along with the extension of the employment wage subsidy scheme (EWSS) into next year. It also called for a legally binding mediation body to allow for progress between retail tenants and landlords.

Halving of grants 'a huge blow'

The group said grant supports for online retailers totalled €11m last year, but will be more than halved to €5m this year – calling that move “a huge blow” to smaller retailers, in particular.

It called Government initiatives such as the online retail scheme “a drop in the ocean” for thousands of businesses that now find themselves “on the brink”.

“The retail industry in Ireland has never experienced a crisis like Covid,” Retail Excellence managing director Duncan Graham told the committee, adding that the sector has been “decimated” by the pandemic: 

Thousands of businesses have already been forced to close their doors and many will not survive the coming months as society begins to return to some form of normality. 

He also warned that the Covid crisis has seen several major international retailers defer planned investment in Ireland, with no indication that they will go back on their decisions.

Workers 'need stronger social wage'  

The Irish Congress of Trade Unions (ICTU) told the committee better pay and conditions are needed for retail workers.

“They need decent pay, they need job security and they need a voice at work – — and that means collective bargaining rights across the sector,” said ICTU retail representative MacDara Doyle.

“They also need to see a stronger social wage – particularly in respect of affordable childcare and affordable housing,” he said.

ICTU said Covid has exposed Ireland’s “shameful dependency” on workers who are among the lowest paid and the most insecure in the workforce.

It pointed out that nearly 300,000 people are employed in the retail sector, with it being one of the largest tax contributors to the State, providing €7bn in direct taxes.

“Clearly, the sector plays a pivotal role in the economy and will be a key driver of any post-pandemic recovery, but that cannot be a recovery that comes at any price,” Mr Doyle said.

Call for retail rent amnesty

Retail Excellence has, this week, demanded a rent amnesty for shopowners, in the form of 50% of rent due for the first four months of this year – the last full lockdown period – being written off.

It said many retailers face an impossible task to meet their rent obligations and should be able to stagger payments to landlords. Mr Graham said some retailers have reached compromises with landlords, but many haven’t. He pinpointed shopping centre tenants in Dublin and Limerick as being among those worst affected by landlords demanding full rental payment.

Mr Graham also said Brexit remains a major issue for retailers and still has the potential to cause “prolonged disruption” to businesses.