InBus_Win09_1-55:InBusiness 1-61 11/12/2009 16:17 Page 31
Retail Report | FEATURE
Fighting Chance
for Retailers
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The retail sector has been one of the worst affected industries since the downturn.
Ruraidh Conlon O’Reilly finds out just how much more pain it can take.
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WITH LIVE REGISTER numbers 160,000 for further reductions is probably limited. “One
higher than they were in January, it is clear that thing which seems to be holding up is the
2009 delivered a cargo of bad unemployment grocery sector, because of all the price cutting,”
news not seen since the 1980s. Among those says Stanley. “Within retail, it tends to be only
who lost their jobs between mid-2008 and mid- grocery retailers who are still buying sites and
2009 were an estimated 29,000 retail expanding around the country.”
employees. The sector expects further bad
employment news throughout the winter, and SHARP DECLINE
this year will not be remembered fondly. A standout feature of the sales figures has been
“Different lines of business have been hit in the extraordinary hit taken by the motor
different ways,” explains David Fitzsimons, CEO industry. Motor trades have dropped by over
of Retail Excellence Ireland, whose members 29 per cent in the year up to August 2009, with
operate over 8,000 stores nationwide. new car registrations dipping by 62.4 per cent.
“IN THE PAST, IT
“Hardware was the worst affected, followed by Calling for the introduction of a scrappage
WOULDN'T BE UNUSUAL
home interiors and then electrical brown and scheme, Alan Nolan, Director General of the
white goods. In fact, everybody is demonstrating Society of the Irish Motor Industry says that the
FOR A LANDLORD TO SIGN
negative growth for the period, with the sector has been “decimated”, suffering over
A TENANT UP AND NOT
exception of the discounters.” 10,000 job losses. The decline is many times
SEE THEM AGAIN UNTIL
The primary difficulty within retail was a worse than in other European countries.
decline in sales, particularly caused by a shortfall In fact, the motor sales figures are so poor THE REVIEW IN FIVE
in consumer confidence. “There's a lot of doubt that if removed from the general sales data, the
YEARS' TIME.”
in the market. People are saving because decrease is a more respectable 5.2 per cent,
they're unsure, so there's a lack of general instead of 9 per cent. “We're around 70 per
– Florence Stanley
customer activity. It's a totally different landscape cent down on a normal year like 2007. The real
to two years ago,” says Fitzsimons. problem is that car sales are at the heart of the lifeline to the ailing industry,” Nolan says. “It
“Discretionary spending has been put on motor industry and all the other business like gives our members an incentive to offer to
hold, and there's a very significant fall-off in servicing, repairs and used cars depends on customers who, this time last year, had little
sales year-on-year,” agrees Florence Stanley, new car sales,” says Nolan. cause for confidence. This creative policy will
Director in CB Richard Ellis' Retail Division. The “Cars are a very big ticket item. People support jobs, encourage customers back to
sector remains “extremely fragile”. By August, require a degree in confidence that they'll be dealers’ forecourts, while at the same time
retail sales volumes were down by 9 per cent able to repay the borrowing on the car over the boosting government coffers. Based on our
on the previous year's figure, showing a shallow years ahead. You need confidence in your job experience of the last scrappage scheme, I have
recovery during the summer months before and your income, and people just don't have no doubt that it will be a success.”
falling again. that at the moment. Even if they do, finance is a The scrappage scheme is being introduced
The sector moved to boost demand by big problem, and in fact to our surprise the with effect from January 1st, 2010, running until
cutting prices, leading to a fall in the Consumer Credit Unions have emerged as the biggest December 31st, 2010, and makes provision for
Price Index (CPI), which dropped by 6.5 per providers of new car finance.” VRT relief of up to €1,500 applicable to new
cent in the 12 months to September 2009. However, the announcement of a scrappage cars of emission bands A or B (i.e. with CO
2
Retailers adjusted prices further downwards scheme in December’s budget offers some emissions of 140g/km or less). It is open to cars
than they otherwise might have, but the scope hope. “This scrappage scheme is a welcome ten years or older, of which there are 600,000
InBusiness Winter 09 31
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