Upbeat retailers declare turning point
However, in a warning to trade unions, they say recent talk of widescale pay rises for workers could derail progress and discourage employers from creating new jobs.
Retail Ireland estimates consumer spending will rise by 2.7% in 2015, more than double the 1.3% growth last year, the first year of growth since the recession.
It said there was a “clear indication that a turning point has finally been reached”, adding: “There is now real hope that the pace of recovery will increase during 2015.”
The group, which represents 3,000 shops in a sector that employs 275,000, said key factors expected to drive the growth include an anticipated rise of 55,000 in the numbers at work.
Their forecast came as Jobs Minister Richard Bruton said the Government’s job-creation plans were on track to halve unemployment to 5%-6% in the next four years. “Full employment by 2018 is a realistic target,” he said.
Shops are also banking on an expected increase of 3.5%-4% in disposable income and the knock-on effect of falling oil prices. They say that every $10 drop in the price of a barrel of oil translates into €100m in extra spending power for Irish consumers.
Falling fuel prices have meant that while volume sales at petrol stations were up 3.2% in 2014, the value of sales only rose 0.3% — a pattern repeated elsewhere.
The amount of goods sold by department stores rose 5.2% last year but the value of those sales only increased by 1.9%.
In furniture, lighting, and homeware, sales volumes increased by 21% but sales values were up just 14.5%, while computer and electrical shops shifted 8.9% more products but saw just 2.9% more money at the tills.
Across the entire retail sector, volume sales increased by 3.9% but the value of sales was less than half that at 1.4%. This included outlets where both volumes and values fell — pharmacies, bookshops, newsagents, stationers, off-licences, and specialist food stores such as butchers, fishmongers, and bakeries.
Retail Ireland director Tom Burke said that while the overall picture for the sector is good, the growth came from a very low base, with the value of sales still 17% below the peak in 2008 and “exorbitant rents and unrealistic commercial rates” presenting barriers to recovery.
He also fired a warning shot about expectations of pay increases. “Talk from certain unions of large, widespread pay awards is utterly unrealistic and at odds with the reality facing retailers around the country,” said Mr Burke.
In recent weeks, Siptu has said it wants to push for 5% pay rises across the private and public sectors as well as an increase in the minimum wage. Mandate has been working on pay increases specifically in the retail sector and is organising a ballot for industrial action by Dunnes Stores workers. Impact, which represents public-sector workers, has said the recovery will only be sustained if workers have more pay in their pockets.
Mr Burke signalled that his members would not entertain such demands.
“Creating unrealistic expectations will only result in harmful discord in workplaces and could force companies to rethink recruitment plans,” he said. “Retail was one of the last sectors to feel the recovery and we still have a very long way to go.”
