Government imposed costs are crippling independent retailers
RGDATA calls for an immediate moratorium on Government imposed costs.
“Government imposed costs are the biggest single threat to the viability of local shops,” says Tara Buckley, Director General RGDATA.
RGDATA, the representative association for over 3,000 local shops, convenience stores and
supermarkets nationwide, has warned that a raft of Government imposed cost increases
represents the single biggest threat to the viability of local shops to continue trading through
current difficult conditions.
The RGDATA warning comes following reports that the Low Pay Commission is proposing a
12.4% increase in the National Minimum Wage – RGDATA estimate that this will increase
the gross wage bill for an employee on the NMW by over €3,000 per annum and will also
increase the wage costs for all other employees on higher rates who expect increases on
parity with the NMW.
This increased cost would be on top of the additional costs associated with;
• The new St Brigid’s Day Bank Holiday (€110)
• The contingent costs of statutory sick pay (€550)
• Pension Auto Enrolment (€386)
Collectively these costs amount to an additional €4,000 per employee in labour costs that
employers will need to find, just to keep apace of new legal labour obligations being
introduced by the Government. These additional costs are not sustainable at a time when
shops are facing considerable competitive, compliance and inflationary pressures and are
striving to keep food costs down for their customers.
RGDATA Director General Tara Buckley said “This is not about employers being Grinches but about recognising that local food shops are not high margin businesses and operate in extremely challenging environments.
“Business owners cannot just magic an extra €4,000 per annum per employee from thin air – this is money that will have to be found through getting more customers, charging higher prices, reducing employee hours or cutting costs. And these increased costs are coming at a time when retailers are already facing a plethora of additional compliance costs associated with bring back schemes, the circular economy and enhanced reporting obligations.
“Government needs to get real and recognise that retail businesses do not have an endless capacity to absorb higher costs directly imposed by the State. Government cannot continue to impose higher costs on convenience retailers and expect the price of food to drop. There needs to be a moratorium on additional State imposed costs now and RGDATA will be urgently seeking a Government commitment in this regard from the Minister for Enterprise, Trade and Employment”