Business Irish

Wednesday 20 September 2017

Retailers need help to hold jobs, despite slight upturn

Mark Fielding
Mark Fielding
Sarah McCabe

Sarah McCabe

THE future for SME retail traders remains "bleak", an industry group has warned, after the value of November sales slipped.

ISME, which represents small and medium-sized businesses across the country, has called for a strategy group to be established in order to assist struggling Irish retailers.

The organisation predicted last week that there would be further job losses in the trade despite a gradual improvement in the wider economy.

ISME head Mark Fielding said his organisation had detected "worrying results" in relation to future employment indicators for retailers, with 9 per cent stating they would employ fewer people in 2014, in a survey taken at the end of last year.

He claimed the Government was "idly standing by" while the retail sector suffered, and he called for a long-awaited retail strategy group to be established.

"Although consumer sentiment picked up in the most recent official survey, households are still very nervous about the economic climate and are more willing to save than spend until there is greater clarity about the outlook going forward," said Alan McQuaid, an economist at Merrion Stockbrokers.

His comments came after the Central Statistics Office (CSO) said the value of retail sales in November had edged 0.3 per cent lower, though the volume of sales in the month was unchanged. The sectors recording the biggest declines were: books, newspapers and stationery, down 3.2 per cent; motor vehicles, down 2.5 per cent; and food, beverage and tobacco, down 1.8 per cent.

In more positive SME-related news, the Irish Independent revealed last week that a scheme granting money to small businesses to support online selling is being rolled out nationwide.

Research from the European Commission indicates that traditional businesses which have a meaningful online presence grow twice as fast, export twice as much and employ twice as many people. But Ireland's small businesses have been slow to adapt; fewer than one in four small Irish businesses are trading online.

The scheme will award €2,500 to small businesses around the country, to support their entry into online retailing. A total of €5m has been set aside for the fund, meaning up to 2,000 awards can be made.

The €2,500 award comes in the form of a voucher rather than cash, which limits spending to designated companies that facilitate online selling. This list includes search engine optimisation companies and website hosting businesses.

Businesses will be eligible to apply for the voucher scheme from the middle of the year. It is restricted to enterprises which employ fewer than 10 people and have a turnover of less than €2m per year. It will be administered by county and city enterprise boards. A pilot version of the scheme was trialled on 50 Dublin businesses last October and its second phase will begin next month.

"There is an enormous opportunity for Irish businesses in the online space and significant risks if they do not develop online trading platforms," said Communications Minister Pat Rabbitte.

"In Ireland, where the digital economy represents 4.4 per cent of GDP, there is a real opportunity for small businesses to grow."

He added, "My ambition is to ensure that a much greater proportion of the online spend stays in Ireland, supports Irish businesses and creates jobs in this country.

"For that to happen many more Irish businesses need to offer services online."

In more good news, research showed that delays in payments to businesses continued to improve between October and December.

The latest SME Credit Watch Survey found that SMEs waited an average of 62 days to be paid during the three months, down from 63 in the previous three-month period. This was the shortest delay recorded since late 2007.

But chief executive Mark Fielding said it was still too long a delay, and that small businesses were too fearful of upsetting larger customers to clamp down on this behaviour.

"We welcome the fact that SMEs do not have to wait as long as before to be paid. However, an average of 62 days is still too long and the fact that less than 3 per cent of businesses charge interest on overdue payments clearly shows the failure of the legislation to assist SMEs in the unequal struggle with larger customers," he said.

Sarah McCabe

Irish Independent

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