Irish retailers warn of ‘unsustainable’ energy price hikes

Irish retailers warn of ‘unsustainable’ energy price hikes

Forecourt owners have had to make tough decisions with retailers facing energy cost hikes of up to 400% since January 2022.

That’s the grim finding from RGDATA, which recently reported that energy costs increases are crippling the sector after it su8rveyed  its 3,500 retail members.

While some retailers have been able to limit the impact of the cost increases through affinity schemes, many of these schemes are now expiring and new elevated rates will apply. Some retailers have also been able to reduce consumption through retrofitting stores, but the costs associated with this are prohibitive for smaller shops.

Retailers have called for immediate government action to stem rising energy costs and for interim emergency measures to assist with meeting the cost of the energy hikes.

“Of 1,200 shops surveyed, all reported increases in energy costs, with most reporting a doubling in electricity charges with some experiencing increases of up to 400%.

70% of the respondents were with Electric Ireland, with the remainder supplied by Energia, SSE, Pinergy, and Panda, and all respondents reported that they have very little scope to reduce energy costs by reducing usage given the demands of refrigeration, heat and light in shops.

All respondents believe that the energy market has failed and that the Government needs to intervene.

The vast majority of retailers surveyed believe that the energy companies are manipulating the energy crisis to maximise profits and prices. 80% of retailers said that the Government needs to introduce price caps on energy prices, with 70% calling for energy credits to be introduced on bills. 40% called for the reintroduction of the wage subsidy scheme to assist businesses struggling to manage costs as a consequence of energy price hikes.

Retailers indicated that the energy crisis would push them to take drastic actions, with 80% citing reduction of overheads including staff costs; 30% considering increasing prices and 30% warning they may cease trading if energy costs continue at the current levels.

One Co Mayo retailer said this crisis was going to do more damage to small business than the pandemic ever did, while another retailer in Co Roscommon described crying on receiving the latest bill which had increased by 300% since January.

Another in Co Mayo said: “We are a small country convenience store and feel that price increases will push our customers to the discounters. I will have to lay off staff to cover the electricity bill or consider closing our deli for the winter.”

A Co Sligo retailer commented: “We are devastated. We survived Covid and this is worse.  We can’t trade out of this position.”

RGDATA Director General, Tara Buckley said: “The rates of increased electricity prices being imposed on food retailers are shocking and cannot be sustained. These shops, which are significant local employers and are a core part of the local community infrastructure throughout Ireland, cannot sustain electricity price increases of up to 400% in some instances.”

Red more in the latest edition of Ireland’s Forecourt and Convenience Retailer.