Challenges and Strategies: Retail Landscape in Ireland 2024
As we progress into 2024, the economic landscape of Ireland presents a critical challenge for the retail sector. Retailers, known for their inherent positivity and resilience, now confront a surge in operational costs that threatens to undermine even the sturdiest among us.While there has been an avalanche of new policy measures that are putting pressure on business costs, the most notable adjustment of the national minimum wage to €12.70 has introduced some major challenges for retailers, balancing the commendable goal of ensuring a fair standard of living for employees with the practical financial capabilities of businesses, particularly small and medium-sized enterprises (SMEs), which will struggle to shoulder these costs without adverse effects.
Our latest survey, which includes the views of 128 retail companies representing approximately 3000 stores, from SMEs to some of Ireland’s corporate giants, reveals a strategic response to these financial pressures. Nearly half of retailers surveyed are considering a reduction in operational hours, while another 35% are faced with the prospect of price increases as a means to balance the scales.We’ve observed a 70% increase in sick pay utilization, with reports indicating a trend of some employees treating the additional sick leave akin to extra holidays. With auto-enrollment for pensions on the horizon, the initiation of repayments for the Revenue Debt Warehousing Scheme, and the new EU directive on 30-day payment terms looming in 2024, it is set to test the industry.
The potential for operational efficiencies, cost reductions, and, in some cases, employee redundancies loom large, given that an alarming 48% of surveyed retailers don’t have the bandwidth to accommodate these costs.At Retail Excellence Ireland (REI), we are determined to use the insights from this survey to communicate the seriousness of our situation to Minister Richmond and the government. The message is unequivocal: retailers are at a tipping point and cannot continuously bear the escalating burden of these costs without proper intervention and substantial measures to support the industry.
While the Increased Cost of Business Scheme will offer grant assistance to SMEs, it only serves as the starting point for a broader conversation about the transition to a living wage, pension autoenrollment, and other significant industry challenges on the horizon.We will persist in lobbying our case at the highest levels of government, but your local influence can help. Dialogue with local TDs is essential; we encourage you to share the realities of these pressures with the frankness they demand, emphasizing the need for more industry support.
Let’s ensure our collective voice is not only heard but acted upon.
