Families scared by financial crisis still afraid to spend.
Government’s message must be clear and unambiguous.
Retailers’ cost base must be decreased.
ISME, Monday 28th July 2014.
Reacting to today’s Retail Sales Figures for June from the CSO (28th July), ISME, the Irish Small & Medium Enterprises Association, warned that economic uncertainty is still holding back consumer spending. The Association called on the Government to at least inform the country that there will be no further taxes and that the ‘austerity’ regime is being replaced with prudent economic management.
Retail Sales figures for June show a decrease of -1.7% in volume in the month and -0.3% in value. There has been an increase of 4.8% in volume and 3.3% in value in the year. When motor sales are excluded sales volume was up 3.6% and sales value was up 2.1% in the year.
Commenting, Mark Fielding, ISME CEO, said, “The return from recession, hampered by a broken banking system and a general psychology of fear can be helped by better communication from Government spokespersons who need to point the way and reassure. The first message is to state that there will be no more tax increases. Secondly that state investment will increase leading to new jobs and a reduction in state expenditure in social welfare”. “If we can nurture consumer confidence, it will result in increased domestic spending, leading to a virtuous circle of growth and employment and increased tax revenues. The other side of the equation must be the continuous curtailment of cost increases and here again the Government has a part to play.”
The main issues are:
Excessive retail business costs, including the ‘punishment tax’ on cigarette retailers.
The increase in employers’ PRSI on lower pay.
Surge in Shadow Economy.
Introduction of a Code of Practice, with an ombudsman for the sector.
Review of the effect of the abolition of the Groceries Order on prices.
Commercial rates, development contributions and unrealistic rents.
Town centre revitalization.
Social welfare anomalies and inflexibilities.
Lack of bank credit availability for retail SMEs.
Sector specific training.
“Government economic news is driving consumer behavior and therefore must be clear and unambiguous so that sentiment is not damaged. An indicator that the 2015 Budget will give more take-home wages would be a start,” concluded Fielding.