Retailers hope for rent changes

AS many as 20,000 jobs could be created in the retail industry if the Government decides to scrap upward-only rent reviews.

Minister for Justice Alan Shatter said he has forwarded outline proposals to scrap upward-only rent reviews on existing retail leases to the Attorney General.

Retail Excellence Ireland (REI) said an average of 14 new positions per company could be created and 45 positions secured in those retailing firms currently affected by upward-only rent reviews if they are abolished.

A survey of 187 retailers by REI also found that two-thirds of retailers expect the Government to improve consumer sentiment.

Retailers surveyed have seen sales volumes fall by an average of 30% since 2007 while almost three-quarters do not expect a return to year-on-year growth until the fourth-quarter of 2011.

Retailers are predicting a further 5% year-on-year reduction in sales for 2011 compared to 2010, with the universal social charge accounting for 4% of this fall.

The survey also reveals that 85% of retailers do not believe adequate credit finance is being made available by Irish banks.

Head of REI David Fitzsimons said the justice minister is to be congratulated for taking the initiative early on the abolition of upward-only rent reviews.

He said: “The good news is that a move to upwards and downwards rent reviews will allow Irish retailers to invest in their business and hire additional staff.

“Overall, this means that 20,000 new jobs could be created in the retail industry once unjustifiably high rents are ended.”

Mr Fitzsimons said that a majority of REI’s members are hopeful that 2011 will be the bottoming-out year.

“The survey also indicates that, contrary to what many landlords report, and in spite of the record fall in sales levels, less than a third of retailers who ask for a rent reduction receive one.

“If evidence was needed, this clearly shows the need for urgent Government action on the issue. Landlords cannot be allowed stand over the loss of jobs on a massive scale in the retail industry,” he said.

Retailers have been hit hard in the last few years as falling consumer confidence means shoppers spend less in stores. Bad weather during the Christmas period also contributed to poor sales.