Tuesday 12 December 2017

Retail recovery to continue amid warning on pay rises

A $10 fall in the price of oil gives shoppers an extra €100m in spending power
A $10 fall in the price of oil gives shoppers an extra €100m in spending power
John Mulligan

John Mulligan

Ireland's retail sector should see further improvement this year, with a recovery "starting to gain traction", according to Retail Ireland, a division of Ibec.

The representative body has also slammed union calls for wage increases this year.

"Talk from certain unions of large, wide-spread pay awards is utterly unrealistic and at odds with the reality facing retailers around the country," claimed Retail Ireland director Tom Burke.

"Creating unrealistic expectations will only result in harmful discord in workplaces and could force companies to rethink recruitment plans. Retail was one of the last sectors to feel the recovery and we still have a very long way to go," he insisted.

Retail Ireland said that strong VAT returns in January, which were up nearly 13pc year-on-year to €225m, suggest a recovery in the retail sector is taking hold, however.

But it warned that recovery remains in its infancy, with many businesses constrained by boomtime costs and charges.

Retail Ireland reckons that consumer spending will rise by 2.7pc this year, following growth of 1.3pc last year.

Key factors supporting further recovery over the coming months include an expected rise of 55,000 in the numbers at work, and a increase of between 3.5pc and 4pc in disposable income, according to the group.

It also pointed out that the sharp fall in oil prices will also boost spending power. It said that every $10 fall in the price of a barrel of oil translates into an additional €100m in spending power for Irish consumers.

They'll also benefit from another year of low inflation in 2015, fuelled in part by competition. Retail Ireland estimates inflation will be 0.4pc this year.

Irish Independent

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