Retailers call for VAT cut to ease spending fears
Electronic goods, children's wear and jewellery are suffering the most in successive quarters of decline for retailers, who are now calling for a 3pc drop in the VAT rate in Budget 2018.
Experts from Retail Excellence are calling for a drop in the VAT rate in order to avoid "exposed" Ireland being further damaged by Brexit.
The group launched its Budget submission yesterday, making a number of calls ahead of Budget 2018 - including for an increase in funding to help retailers move online. The group has also appealed for increased infrastructural investment, Garda resources, town renewal funding and more investment in home renewal.
Brexit has already significantly affected the industry and "will impact on the sustainability of economic growth trends", according to Retail Excellence's Lorraine Higgins.
"Our quarterly trading reports have recorded three successive quarters of decline, primarily as a consequence of sterling devaluation and a migration to online shopping," she said.
Ms Higgins told the Irish Independent that children's clothing, jewellery and footwear were among the sectors which have been hit the worst.
The development of online shopping trends has led to €600,000 of spend every hour being fulfilled by businesses operating outside the country, according to the report.
However, the group also said that Ireland could benefit from a European-wide online spend of €598bn if enough support is provided by the State in new initiatives.
David Fitzsimons, CEO of Retail Excellence, said "anything that can migrate out of the country" is being hurt by deflation in sterling and disparity in the VAT rate between Ireland and the UK.
"A lot of younger people have been buying laptops and tablets which have led to our electronic retailers struggling," Mr Fitzsimons told the Irish Independent.
"We don't want to appeal to consumers to not shop abroad, they're entitled to do that, but we want a level playing field."