Positive retail outlook but cost pressures rising
Retail Ireland, the Ibec group that represents the sector, today published its latest quarterly Retail Monitor, which reports steady growth across the sector, but warned of heightened Brexit risks and elevated cost pressures over the coming months.
Retailers enjoyed a positive end to 2019, which was broadly in line with Retail Ireland projections. The total value of Irish core retail sales (excluding cars and bars) increased by 3.2% compared with December 2018. This was lower than the 5.4% increase in the volume of sales over the period, evidence of ongoing discounting across the sectors. The economic fundamentals remain positive with strong employment numbers and rising disposable income, but there are risks on the horizon.
On Brexit risks, Retail Ireland Director Arnold Dillon said: “There is the very real prospect of significant trade barriers between Britain and Ireland from January 2021 and retail supply chains are particularly exposed. Any new trade barriers will increase costs and are likely to feed into higher prices for consumers.”
On cost pressures across the sector, Mr Dillon continued: “While intense competition is keeping retail prices low, cost pressures continue to rise. Rising insurance premiums, fraudulent and exaggerated claims and general inefficiencies in our insurance market have become a major challenge for retailers in recent years. Awards for soft tissue injuries in Ireland are over four times those of the UK and are unsustainable. Reform has been promised, but we are still waiting for change.”