Huge job losses predicted for the retail sector

THE head of one of the country’s top supermarket chains has said he will be “gobsmacked” if there is not significant job losses in the retail sector in the new year.

Superquinn chief executive Simon Burke said the supermarket’s sales figures for the past week were the worst seen in a decade, and that jobs would be lost across the sector if the current situation continues.

With top chains MFI and Woolworths going bust in Britain this week, and an EU survey putting consumer confidence at its lowest in 23 years, concern is mounting that sales slumps, exacerbated by shoppers crossing the border in search of cheaper goods, will have similar dire consequences for Irish retailers.

Gerry Harvey, chairman of electrical and furniture retailer Harvey Norman, said anyone who had recently opened a business in Ireland would want to “cut their throat”.

Speaking at the companies AGM in Australia, Gerry Harvey said he regretted expanding into the Irish market, and blamed the company’s loss of profits — down by a third — on the Irish market, calling performance here “catastrophic”.

Mr Harvey described the situation as the “return of potato famine”, but said the firm would not be pulling out of Ireland because of all the money it had invested.

Meanwhile, businesses in Drogheda have begun a campaign to urge the Government to reduce the VAT rate to 15% to help them compete with retailers north of the border.

The Drogheda and District Chamber of Commerce has called for the reduction, claiming it help stem the flow of shoppers to the north.

In an open letter to Minister for Finance Brian Lenihan and Tánaiste Mary Coughlan, the chamber called on them to “act urgently” to assist the retail sector and “stem the flow of income and sales to the jurisdiction of the UK government”.

Patricia Rooney, president of the chamber, said shops were “extremely quiet” for the time of year and shop owners had to watch customers travelling to Newry to get better value.

She said the British government had responded quickly to the needs of businesses by stimulating the economy with a VAT cut while ours had increased it.

Ms Rooney also pointed out that northern businesses had organised a republic-wide advertising campaign to attract southern shoppers into their stores and hotels and restaurants with even more incentives and appealed for action.