Two convenience stores a week are closing down — 400 over the last two years — as shop owners struggle to cope with tightening bank credit and high rents and rates, the Convenience Stores and Newsagents Association has claimed.
And 4,200 outlets still in business are battling to avoid joining those closing down as average trading has fallen by 15%, the association’s chief executive, Vincent Jennings, said at the CSNA annual general meeting in Dublin yesterday.
Mr Jennings said retailers in Kerry and Wexford had been hardest hit, but he stressed the closures were impacting rural and urban areas equally.
“Not only has the recession taken its toll but the Government, banks and wholesalers are heaping more pressure on the local shop,” he said.
“The 4,200 outlets still trading were under severe financial pressure.
“Accountants and business advisers were meeting shop owners on a daily basis trying to work out business survival plans,” Mr Jennings said.
He contends government policy of implementing what he describes as “excessive excises and VAT hikes” is playing a major role in the sector’s difficulties.
“The policy of raising the price of tobacco is unwittingly playing into the hands of the smugglers. The continually diminishing returns from legitimate tobacco sales should be seen as a wake-up call for the Department of Finance.
“The Government must set aside its recruitment embargo to take on more staff to fight the sale of illegal tobacco and fuel, which costs the exchequer €350m annually,” he said.
And he called for a change in the law to allow retailers to determine the price of tobacco products sold in their stores.
“We are of the view that the market rather than the Department of Finance or the tobacco companies should set the price of tobacco.”
He also urged local authorities not to see the local shop owner as a soft touch for easy revenue but to set realistic rates and fair charges.
The CSNA boss welcomed the commitment by Brendan Howlin, the minister for public expenditure and reform, to safeguard retailers’ 6%margin in the legislation being prepared for the sale of new National Lottery licence.
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