Family business owner Daithí O’Connor says the inflation clock is ticking loudly for both Irish families and small businesses.
Mr O’Connor – who operates the World of Wonder toy business across Cork and Kerry – warned that the full impact of the inflation spiral won’t be felt until next autumn for families and family-run businesses.
He said Ireland now needs to do everything it can to mitigate the fall-out from surging fuel, labour and import-related inflation before its full effect hammers home from October.
“The reality is that families and businesses are being somewhat insulated from fuel inflation because we are moving into the summer and warmer weather.
“Businesses and homes aren’t as reliant on heating.
“But what happens next October when everyone starts relying on gas, oil and electrical heating as the weather gets colder and we move into the late autumn and winter? That is when the full impact of the current price hikes will be felt.”
The retailer revealed that his business has already had to cope with a 40pc-plus hike in diesel prices, a 30pc-plus increase in electricity prices and a threatened 40pc hike in gas prices.
Some suppliers warned electricity prices will soar by another 20-25pc from May – exerting enormous pressure on family and family-business budgets.
“Light and fuel bills are already definitely up by 20pc to 30pc on 2019,” he said.
Because of soaring import-related inflation, his firm has had to absorb all of those increases without passing them on to consumers.
“We have installed LED lighting in a bid to reduce bills. We are fortunate in that we are not as exposed to heating costs as, say, hotels and restaurants.”
Worse still, businesses face the spectre of wage inflation at the very time they are struggling to fill positions left vacant by the fall-out from the Covid-19 pandemic.
“Everyone expected things to be a bit easier when the worst of the pandemic was over.
“The sheer scale of the inflationary pressures hitting families and businesses has taken everyone by surprise.”
Mr O’Connor said his family business has already been hit by soaring product import costs – ranging from sky-high container shipping charges to higher wholesale product prices. In some cases, he said shipping costs from China are three to four times what they were just a few years ago.
“Every importer has had to pass those costs on to the consumer – there was just no way anyone could absorb increases of that scale.”
He said retailers desperately trying to rebuild businesses after the pandemic have largely tried to absorb heating and lighting costs to encourage consumer spending.
His toy firm runs its own supply lorry and has tried to absorb the higher costs generated from spiralling diesel prices.
“Businesses are also finding it very, very difficult to recruit staff. Some traders have been very heavily hit by the inability to recruit the people they need,” he said.
“It will be from October and November (when) the full impact of petrol, diesel, gas and electricity price increases will be felt.
“I don’t think there will be any hiding place left then.”