Trade body Retail Excellence Ireland has drawn up proposals similar to those demanded by UK retailers and submitted them to all political parties. They include state action on providing credit to retailers, the underwriting of credit insurance facilities and a reduction in VAT to 15 per cent, in line with the UK Government’s action in December. The Irish rate of VAT stands at 21.5 per cent.
The move, backed by retailers such as Musgrave and Superquinn, also calls for a code of practice in relation to rents, a reduction in the minimum wage and wants the new rateable business rates calculation to be postponed until late 2011.
Retail Excellence Ireland chief executive David Fitzsimons said: “Retailers are starved for cash, people are going to the wall every week. We want the government to manipulate the levers at their disposal. Irish retailing is fundamental to the success of our economy.”
He added that there is “real price deflation between the UK and Ireland”, and that UK suppliers “must cease anti-competitive practices and allow retailers to purchase directly in sterling”.
The Irish retail industry is the largest employer in the economy, employing 311,000 people. In the third quarter of 2008 retail sales volumes declined 7 per cent.
Retail Excellence Ireland expected a like-for-like decline of 14 per cent in the final quarter of last year, while forecasting more than 25,000 redundancies in the sector this year.
GameStop, which runs over 50 stores in Ireland, said some of its suppliers would not let the retailer purchase in sterling.
Its UK head Kevin Neary said Irish retailers have been hit harder than their British counterparts, after a “double whammy” of the declining property market and plummeting consumer confidence.
Fitzsimons, who is yet to receive a response from the Irish government, praised Gordon Brown for acknowledging UK retail’s problems, as reported in Retail Week (January 9), as part of the Backing UK Retail campaign.