Boost for consumers welcome, but National Minimum Wage increase adds to acute cost pressures – Retail Ireland
Retail Ireland today welcomed measures in Budget 2027 that will support household incomes, consumer spending and workforce skills, but warned that the increase in the National Minimum Wage will add significant costs to a sector already facing acute cost pressures. Retail businesses continue to absorb rising labour, energy, logistics and compliance costs in an intensely competitive environment, with limited ability to pass those costs on to consumers.
The organisation welcomed the Budget’s focus on supporting disposable incomes through personal tax measures, as well as investment in skills, training and AI readiness through the National Training Fund and wider workforce development initiatives. These measures will help support consumer demand and improve the long-term competitiveness of the economy. However, rising business costs remain the key concern for retailers across the country. The increase in the employer PRSI threshold will provide some offset to the minimum wage increase, but it is not sufficient to address the cumulative cost burden facing retailers.
Retail Ireland Director Arnold Dillon said: “Measures that put more money into consumers’ pockets are welcome and will help support spending across the economy. However, today’s increase in the National Minimum Wage adds further cost pressure to a sector that is already operating under considerable strain. Retailers are dealing with sustained increases in labour, energy, logistics and regulatory costs while competing in a market where consumers remain highly price conscious.”
“Retailers are committed to providing quality employment and investing in their people, but there is a limit to the costs businesses can absorb. For many retailers, particularly smaller businesses, margins are under severe pressure and every additional cost has consequences for investment, expansion and job creation. While businesses are committed to supporting their employees, the cumulative impact of rising employment costs is becoming increasingly difficult to absorb, particularly for smaller retailers operating on tight margins.”
Retail Ireland also welcomed measures aimed at simplifying administrative requirements for employers and acknowledged the continued focus on public safety, skills development and town centre investment, all of which are important to maintaining vibrant retail communities across the country.
