The Irish retail industry is calling on the country’s government to take action to ease the pressure on struggling companies in the current economic downturn.
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Trade body Retail Excellence Ireland has put forward a proposal to all political parties stating action that needs to be taken in order to help businesses suffering in a “cash-starved economy”.
The seven-page plan asks for state action on providing credit to retailers, new rateable business rates calculations to be postponed until late 2011, a reduction in the minimum wage and a cut in VAT to 15%.
The proposals are similar to those demanded by UK retailers, which also included a reduction in VAT in December last year. The Irish rate of VAT currently stands at 21.5%.
Chief executive David Fitzsimons, who is spearheading the campaign, said “there are real differences in case prices to Irish versus UK grocery retailers” and that UK suppliers “must cease anti-competitive practices and allow retailers to purchase directly in sterling”.
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By GlobalDataThe move, backed by a number of Irish retailers, is also calling for a reduction in market rent, excise rates to be brought into line with neighbouring countries and for branded manufacturers to review their wholesale and distribution cost base in Ireland.
The Irish grocery market is worth EUR9.3bn (US$12.04bn), according to the lastest figures from TNS Worldpanel, and is growing by 5.7% year-on-year in value. However, increased promotional activity in the market is one of the main reasons value growth is slowing down versus last year.
Last month, Irish supermarket group Superquinn announced plans to cut 400 jobs – around 10% of its workforce – and close one store in Dundalk as it looked to cut costs out of the business.
The company said that its ‘Programme for Competitiveness and Change’ is designed to strengthen the company’s trading position in a “radically changed market”.
