Days to go until Budget ’24 on 10th October – what can retailers expect?

With just days now until we know what’s in-store with Budget ’24 – RGDATA and other representative bodies have been urging retailers to let TDs know their views on the myriad challenges they face.

“RGDATA continues to focus on getting the message out loud and clear to Government that Budget 2024 needs to include support for independent retailers who are facing unprecedented increases in wage costs due to Government initiatives in relation to proposed Minimum Wage increases, sick pay increases, extra Public holiday and Pension Auto-Enrolment.

“Our campaign on Combatting Retail Crime continues with interventions at the Retail Forum and in the media and we brought together the Local Jobs Alliance to make a strong unified submission on what the Government needs to do to support indigenous Irish employers. With Budget day looming we urge shop owners to contact local politicians and tell them about your concerns for your business” wrote director Tara Buckley.

In its detailed submission to the government, RGDA stated that the economic context for retailers is demanding and challenging.

Operating environment

“The operating environment for Ireland’s independent retail grocery sector remains challenging
at present. Inflationary and cost of living pressures are directly impacting on consumers leading
to reduced consumer confidence and lower expenditure levels. Retailers and businesses are
also having to manage sharply increased input costs.

Insurance costs

“Retailers remain concerned at the stubbornly high level of some core input costs – energy and
insurance costs in particular have not shown the level of decrease that might be expected given
the underlying changes in the factors impacting on both sectors. Specifically on insurance,
businesses have yet to see any tangible benefit from the substantial programme of reforms that
have been introduced, with strong suspicions that insurers are gaining through increased
profitability.

On energy costs

“On energy costs, the retail price of electricity remains excessively high given price
movements at wholesale level. High energy costs have a particularly adverse impact on the
independent retail grocery sector, as energy represents such a significant element of the
operating costs for a shop, with 24/7 refrigeration, lighting, heating/air conditioning in all shops.
These additional cost challenges are coming at a time when revenues are either stagnant or
retracting considerably.

On employment costs

“The biggest single increase in the operating costs for retailers stems from recent and pending
changes in employment costs, largely due to new legal requirement introduced by the State
over the last 12 months. Specifically, RGDATA estimates that new legal requirements including
a new Bank Holiday, Auto enrolment, Statutory sick pay and an anticipated increase in the
National Minimum Wage will cost retailers an extra €4,000 per annum in employment costs per
annum. Increases of this level at any time are a major challenge for businesses, but increasing
these costs at a time when retail businesses are under unprecedented commercial pressures,
with result in a reduction in employment numbers, or even threaten the viability of many
independent food stores.”

The outcome will be known on 10th October – IF&CR will have a detailed analysis available in next week’s CLICK.