Local food stores are struggling to manage all the extra costs: RGDATA delegation tells Retail Minister

An RGDATA delegation led by President Colin Fee and Director General Tara Buckley set out the severe challenges local independent shops are currently facing and the very real fears that community shopkeepers have about the impact a raft of new Government measures in early 2024 will have on their businesses. The delegation included shop owners Breda Cahill, Padraig Broderick and John Caulwell who all spoke passionately about the need for support for vital local community shops to assist them in funding all the Government wage and employment measures coming in over the next few months.

Minister Richmond said the Government was intent on progressing to the Living Wage and to extending the paid sick leave to five days for 2024 but it was prepared to review the supports for small businesses. The Department will be hosting stakeholder workshops to identify the cumulative impact of all the proposed wages, sick pay, pensions and other measures and RGDATA said that independent shopkeepers were anxious to engage in the meetings.

Take Action

RGDATA is encouraging members to take action in their campaign statement.

In the recent Budget, the Government announced an increase in the NationalMinimum Wage of €1.40 per hour to € 12.70 per hour from 1 January 2024.This increase comes on top of a host of other Government measures impacting on employment costs:

– Statutory sick pay rising to five days,
– a new public holiday
– pension auto enrolment
– increase in Employers {RSI
– enhanced reporting to Revenue of non taxable employee benefits

COLLECTIVELY THESE WILL HIKE WAGE COSTS BY UP TO €4,200 PER SHOP EMPLOYEE PER ANNUM.

The operating environment for retailers is already extremely challenging – high energy and insurance costs, intense competition, commercial rates and continual pressure to keep prices down. We are also facing further Government imposed increased business costs to deal with the introduction of the Deposit & Return Scheme; a Latte Levy and de Carbonisation.

THE GOVERNMENT IS PROPOSING A DERISORY “SUPPORT SCHEME”

The Government announced an Increased Cost of Business Scheme in the Budget which provides a limited rebate on rates to a maximum of 50% of the commercial rates paid in 2023 BUT only for businesses paying less than €20,000 per year in commercial rates.
Feedback from RGDATA members is that this Scheme will do nothing to help retailers – the support provided is too little and too late.

Taoiseach Leo Varadkar and Enterprise Minister Simon Coveney have said that they believe that businesses can afford to pay these increases.
They do not believe that retailers cannot afford the increases.

WHAT CAN YOU DO?

RGDATA is lobbying the Government seeking a greatly improved Business Cost support scheme. However, it is vital that retail employers make their voices heard loud and clear to their local representatives. Next year we will have at least two elections – the European and Local Elections in June. There is also speculation that the General Election will take place before the end of the year. Politicians are in election mode and concerned about  how they will fare in the next poll.

In a pre-Election environment, it is vital that retailers contact local TDs and Senators from the Government parties (Fianna Fail, Fine Gael & the Green Party) to lobby against the new increases and the inadequate Scheme proposed to offset increased business costs. RGDATA urges you to raise your concerns with local Ministers directly, frequently and with passion. It is also important to get your message across to Government backbench TDs and ask them to raise concerns with the Taoiseach, Tánaiste and Ministers at parliamentary party meetings or directly in face to face contacts.

Get them to report back to you on progress.

It is clear that this Government is out of touch with the challenges facing small businesses and needs to feel pressure from backbenchers in order to  provide better supports to businesses.

WHAT CAN YOU TELL LOCAL POLITICIANS?
• Government employment measures will add over €4,200 extra per employee per year.
• Your business cannot afford this increase – turnover is not going to increase to compensate for this additional State imposed burden.
• Many of these increases stem from costs that should be borne by the State under PRSI (sick pay and pensions)– the State is now passing them to businesses to meet.

• • In order to keep costs down, you will be forced to:
  o Cut hours for employees
  o Cut the number of employees
  o Reduce opening hours
  o Reduce services
  o Make the difficult decision to increase prices
  o Or in some cases even cease trading.

The Government increased Cost of Business Supports are wholly inadequate.

WHAT MEASURES ARE NEEDED?

New measures are needed that will make a difference to manage these costs:
o A 50% cut for 12 months in Employers PRSI
o A subsidy scheme to offset increased employment costs – to at least 50% of the cost of the NMW increase to retailers.
o Real reductions in Commercial Rates – not capped reductions that only apply to some retailers.
If Government Ministers start to see how angry retailers and other SME businesses feel about these high handed increases, then there is a greater
chance that they will introduce improved supports to assist and support
businesses.

RGDATA is asking members to contact them by phone; letter; email and face to face. Give them the facts about your business – how many you employ; the rates you pay; what increases these imposed costs will put on your business. Explain the stress they are putting on you, your family and your team at an extremely challenging time for local independent shops.