Government Urged To Think Of Consumers To Revive Economy

A consumer index study from the Irish Business and Employers Confederation (IBEC) has that Homeowners may be €700 better off each year.

The reduction of mortgage interest rates are expected to result in a 2.4% rise in the amount of discretionary income householders have by the end of this year.

However, the index also showed that while mortgage holders may see their spending power increase, other groups could end up worse off.

IBEC chief economist Fergal O’Brien said the Government needs to consider consumers and their different circumstances in its efforts to revive the economy.

“A significant number will see their spending power increase this year, due to falling interest rates, modest pay rises and the absence of significant additional taxation,” Mr O’Brien went on.

“The Government’s approach to reviving activity in the domestic economy needs to be tailored to reflect the different types of consumer and their different circumstances.”

The European Central Bank is also expected to reduce its rate by a further 0.5% in the coming months, which will have a positive effect on householders.

The Irish Consumer Monitor report from IBEC found non-mortgage holders could see their discretionary income drop between 0.8% and 3.7%

Bodies React To Further Fall In Retail Figures

The volume of retail sales decreased 1.5% in April 2012 when compared with the previous month, Central Statistics Office figures showed today. This equates to an annual decrease of 2.7%.

Chambers Ireland has blamed last’s month’s decline in retail sales on the negative effects of the rise in VAT in Budget 2012.

ISME Chief Executive, Mark Fielding

ISME, the Irish Small & Medium Enterprises Association, reacting to the latest annual reduction of 2.7% in Retail Sales figures issued by the CSO today, has demanded that the Government immediately tackle the high cost base under their influence. The Association outlined that retailers were being ‘wiped out’ the length and breadth of the country, due to a deteriorating domestic economy, driven by consumer uncertainty and ever increasing costs. Unless these key issues are addressed, shops will continue to close, jobs will be lost and a key sector supporting local economies will continue to disintegrate.

 According to ISME Chief Executive, Mark Fielding, “Today’s shocking retail sales figures confirm that when it comes to spending money in the shops, consumers are still cutting back. Overall, retail sales are down by 30% compared with the boom era. This is costing jobs and leading to shop closures. Consumer sentiment is weak and the outlook continues to remain uncertain. The high cost of rents, rates, tax and labour are causing retailers real difficulties and depressing consumer demand.”

“Retail is on the front line and the first to feel the downdraft of the recession. It is high time that the Government introduced policies to support one of the most significant contributors to the economy. We need the immediate formation of a Retail Strategy Group to address the risks to the sector and the Government to implement immediate policies to tackle the cost base, in order to secure the 250,000 jobs in the Retail industry,” concluded Fielding.

Ideas for Ireland? – Northern Ireland Retail Announces Radical Plans To Help Cut Closures

The Northern Ireland Independent Retail Trade Association (NIIRTA) has published a radical report aimed at helping Northern Irelands struggling retail sector.

The Town Centre First report contains 50 solutions to some of the problems towns are facing.

The report is said to address the large amount of retail units and businesses closing down within city centres across the North.

Some of the proposals NIIRTA include:

  • A five-year moratorium on any further out-of-town superstore developments.
  • The creation of a Department for the Economy.
  • Reduce VAT to 5%.
  • Northern Ireland should be marketed as a weekend shopping destination.
  • Create more ‘Virtual Window’ schemes to paint and tidy up derelict shops.
  • An emergency 100% first year rates relief for town centres with a 40%+ shop vacancy rate.
  • Introduce car parking charges in out-of-town superstore car parks.
  • Privatisation of Translink.
  • Introduce a ‘timed disc’ system for delivery and service vehicles.

Read the full story on the Belfast Telegraph

Retail Slips Again, But Gains Very Slightly On Previous Month

Retail sales volumes fell by 1% on an annual basis in March but managed a slight gain of 0.2% compared to the previous month, according to the latest figures from the Central Statistics Office.

If Motor Trades are excluded, the volume of retail sales increased by 0.3% in March 2012 when compared with February 2012, while there was an annual decrease of 1.7%.

Among the main monthly increases are Motors (4.1%), Bars (3.5%), Non-Specialised Stores (0.7%) and Furniture and Lighting (0.7%).

Monthly decreases were recorded in Other Retail Sales (-4.9%), Electrical Goods (-4.2%) Pharmaceuticals Medical and Cosmetic Articles (-1.6%).

The value of retail sales increased by 0.6pc in March 2012 when compared with February 2012 and there was an annual change of -0.4%.

If Motor Trades are excluded, there was a monthly increase of 0.8% in the value of retail sales and an annual change of -0.7%.

ISME, the Irish Small & Medium Enterprises Association, has called on the Government to initiate a coherent strategy for the retail sector through the promised Retail Strategy Group before it is too late. They say thousands of shops throughout the country are struggling to keep their doors open through an unprecedented recession with the 262,000 employees in danger. The Association warned that a further 25,000 employees could lose their jobs in the next year.

Commenting, ISME Chief Executive, Mark Fielding stated, “retailers have invested heavily in their businesses and in response to the downturn, have cut their prices even though their retail sales have shrunk by 30%. At the same time the cost of running a shop has not fallen to the same extent with rents, rates, local charges, waste and even pay rates remaining high. Many of these costs are determined and driven by government, who seem to have a death wish for the sector, despite protestations of support”.

Confidence Improves In SME Sector – Retail Still Suffers

The first quarterly SME business trends survey results for 2012 from ISME, the Irish Small & Medium Enterprises Association, confirms that business confidence among the SME sector has improved, with confidence levels at their best in five years. While a huge level of uncertainty still remains over the domestic economy, the export market and a portion of the international situation seems to be improving, led by improved figures from the US, both of these factors are having a positive effect on confidence.

- Following a sharp decline in Q4 ’11, confidence has recovered, while still in negative figures, to minus 1, from a -24. Business expectations have hit a +5, a massive increase from the previous quarter of -26.

- Exporters are by far the most optimistic about the economy and its future and their Business expectations have risen to a +32, while all the other key indicators for exporters are in the plus range with export outlook at a high +64. Exports in services continue to rise and should increase at a rate of 3.6% for the year.

- The Retail Sector remains the most pessimistic at -14, followed by Manufacturing -6, while Services have come back to a +3 from a -6 in Q4, 2011.

- Current turnover remains in negative territory, albeit improving, with sales expectations rising to +23 from a +10 in the previous quarter. The Association expects a further modest growth through the remainder of 2012.

- While SMEs continue to reduce employment, the number of companies with fewer employees has reduced on the previous quarter, with a net 11% of companies reducing employment, an improvement of 2%. While employment expectations have improved, the pick-up in jobs is quite weak and needs a boost from Government.

- Investment, both current and future has shown a gradual improvement, with more SMEs intending to increase their investment than those who intend to reduce. However it is expected that investment will remain subdued and as the household spending is still in decline, the retail sector will continue to operate well below its peak where there is still excess capacity. The difficulty in accessing bank credit for new opportunities will also act as a dampener on new investment

- The outlook for a return to profits has continued to improve in this quarter although a majority of businesses are still in loss making territory.

The Quarterly Trends survey was conducted at the end of March and had a response rate of 21% with 630 responding.

Irish retail continues to drop – But Department Stores & Electrical Goods Rise

Figures released by the Central Statistics Office have shown that retail within Ireland has continued to fall. February saw sales drop by 0.3%, it was preceded by a drop of 1.1% in January.

If Motor Trades are excluded, the volume of retail sales decreased by 1.0% in February 2012 when compared with January 2012, while there was an annual decrease of 2.1%.

The biggest falls were in Bars (-3.3%), Books and Newspapers (-3.2%) and Motor Trades (-2.9%).

However there was a big rise for department stores (+8.5), followed by electrical goods (+6.3%).

The value of retail sales decreased by 0.1% in February 2012 when compared with January 2012 and there was an annual change of -1.8%.

The figures have emphasised a two speed economy is alive and well in Ireland. With people saving more and more because they don’t know what more they will have taken from them in charges and taxes over the next number of years, these figures will only get worse. Austerity is causing more uncertainty within the consumer. Why will they spend when they know next year it will only get worse for them?