An open letter to our political leaders from RGDATA
2022 has become an “annus horribilis” for the independent retail trade. The fallout from Putin’s illegal invasion of Ukraine, Brexit bedding down and a raft of new legislation and regulations impacting on businesses costs at a time when inflation is rising and consumers are cutting back on spending is taking an enormous toll.
For the first time since I took the helm at the Retail Grocery Dairy & Allied Trades Association (RGDATA), I am hearing stories of genuine despair and fears for the future from the owners of shops, forecourt stores, convenience stores and supermarkets all over this island.
Essential community shops
These are the essential community shops that stepped up during a global pandemic to ensure that local communities had access to food and convenience essentials in a safe and friendly environment. Independent community shopkeepers led the way in coming up with solutions to deal with the challenges posed by COVID and were rightly recognised as vital community hubs. They lived up to their billing as the beating heart of local communities especially when people were confined to within 2k and 5k of their homes.
RGDATA Director, Annie Timothy, who runs a Londis supermarket with her husband Vincent in Co Roscommon, burst into tears when she opened her energy bill in August – it had jumped from €6k to over €20k. I suspect there were many others who did the same. An RGDATA survey revealed that independent shop owners saw energy bills increase by up to 400% since March 2022.
‘Enormous price hikes’
Annie was brave enough to go on national media to tell her story. She has rightly received sympathy. But what she wants is action from the Government. “I have never put out the begging bowl before,” she says. “But this is just too much. I can’t see how I can survive with these enormous price hikes. I cannot put my prices up to cover over €60k extra in energy costs. I cannot pass this burden onto my customers – they are struggling too. I have loyal staff who have been with me for years – I don’t want to reduce their hours or cut jobs either.”
These are the stark choices facing community retailers.
“In my 35 years in business I have never been so afraid for the future,” RGDATA President, Colin Fee who owns four shops, a bar and a restaurant in Co Louth employing 100 people, told the Oireachtas Enterprise Committee when RGDATA made a presentation about the challenges facing SMEs.
Padraig Broderick, another RGDATA Director, who has just invested in a total revamp of his award winning, state of the art, Spar convenience store in Croom Co Limerick revealed that the €40k he borrowed to put solar panels on the roof of his store as part of a €1m revamp has been swallowed up by rising energy bills. “That money was spent trying to ensure that I didn’t go into debt trying to cover the rising energy costs. I have spent the borrowings and I have no solar panels to show for it.
“We were informed that Electric Ireland put its prices up again by 38% on December 1 – there is no business that can absorb these type of price increases at such short notice. I am extremely concerned for the future of my business.”
Rachel Twomey, a second generation retailer running a SuperValu supermarket in Deansgrange, a village in South County Dublin, is not only struggling with an additional €190k plus energy bill for 2022, she has also had to contend with a 30% drop in business caused by a Temporary Covid Mobility Scheme becoming permanent and blocking customers from accessing her store.
“I still pay the €70k a year in commercial rates yet my business has dropped by 30% because this scheme is making it impossible for my customers to access the shop. These schemes may have worked during lockdown when there were few cars on the road but they need to be reimagined based on consultation with the local community to ensure that they work post Covid when all the normal traffic is back on the roads.”
Stress and challenges
These stories of stress and challenges for local shops are coming from every community across the country. These are businesses that are viable, many are the only town or village centre shop in their community. However they have never felt more vulnerable.
Political leaders need to stop regarding businesses as an endless revenue source that can be tapped at will. Businesses only survive if they make enough to pay the staff and the bills and make some return for the entrepreneurs who run them. If the Government, through new costs, obligations, charges or inaction, renders businesses to be uncompetitive, then they will close.
Take urgent action to support SME food retailers. Extend the Temporary Energy Support Scheme to cover the cost increases in July and August. Increase the support provided for energy efficiency schemes. Do a cumulative economic impact of all the proposed changes coming down the track with regard to sick pay, auto enrolment pensions and Living Wage and devise a specific targeted support scheme to support essential local shops to deliver these changes and keep their staff in jobs and their shops trading.
If you want strong local shops to be at the heart of communities on this island, then step up to the plate and support rather than undermine them!