Over half of retailers are in trouble, survey by Vision-net shows
OVER half of Ireland's retailers are currently operating at a "high" or "medium" risk of business failure according to a new nationwide survey which has stress-tested thousands of firms at random in the sector.
A total of 36pc of those surveyed last week by Vision-net showed "high risk" of business failure while a further 19pc were deemed "medium risk". Less than half of the retail businesses surveyed (45pc) were deemed to be "low risk."
In the wake of retail group failures and troubles which have recently arisen in high profile chains like HMV, Blacktie and B&Q, the survey examined the details of 5,600 retailers across the country selected at random from its database of company data. Of these, 1,992 were found to be in the higher risk category.
It has also emerged that retail and wholesale companies accounted for 14pc of all insolvencies last year.
The sector currently accounts for 14.5pc of all jobs in Ireland with 250,000 positions but has already lost 70,000, or 22pc of its employees since 2008 in a period during which sales have fallen by 30pc.
Christine Cullen, the MD of Vision-net said: "As our figures show, the high street is feeling the impact of curbed spending as a result of pay freezes, job losses and sapped confidence."
Responding to the findings of the report, David Fitzsimons, the CEO of Retail Excellence Ireland, said the revelation that 36pc of retailers were at a high risk "comes as no surprise" given the tough environment in which they were now operating.
"Local authority rates remain extremely high and the fact that landlords are still charging Celtic Tiger rents which are not sustainable will result in business failure and job losses."
The survey was commissioned for the purpose of measuring the level of risk being run by companies and consumers who are dealing with retailers. Vision-net, which provides an access service to information and accounts filed with the companies office, urged consumers and companies to use credit check and risk analysis before making any decisions with their money regarding retailers.
But the company also confirmed that retail was not Ireland's riskiest sector, adding that hospitality and construction had recorded "high risk" of failure levels running at 52pc and 40pc respectively.
In contrast, companies in the public administration, health, agriculture, fishing and finance sectors showed the fewest signs of business failure.
Marginally more companies began trading last year compared with 2011 with 13,104 companies getting off the ground this year compared to 12,708 which closed and representing a net gain of 396 firms.