Retailers pessimistic over their prospects for 'challenging' year
The post-Christmas sales have been spectacularly successful for retailers but many are still fearful about their prospects for 2011.
"Next year will be very challenging for the retail sector. Since the start of the recession there has been a massive fall in what customers spend, but the cost of running a shop has hardly fallen at all," said Torlach Denihan, director of Retail Ireland, which represents about 3,000 stores around the country, including many of the big department stores.
Mr Denihan said that the strong post-Christmas busi-ness was badly needed good news after the 10 per cent fall in retail sales in the week before Christmas compared with the same period last year.
However, there was a gloomy prognosis for the coming year.
In all, 66 per cent of Irish retailers polled by Retail Ireland rated the prospects for business in the three months from December to February as "poor" or "very poor".
The poll of 159 retailers was conducted prior to the Budget in early December and the cold snap that caused havoc in the retail sector.
More than 50 per cent of retailers expected to lay people off in the next two months.
Mr Denihan urged the Government to start addressing issues like rents -- which industry insiders say are still too high -- as well as local authority rates.
"Since the start of the recession, there has been a massive fall in what customers spend, but the cost of running a shop has hardly fallen at all.
"Rents, hourly wages, Repak fees and local authority charges have by and large not fallen.
"If the Government is serious about saving jobs in the retail sector it should tackle each of these in turn," he said.
The survey found just 3 per cent of respondents were more confident about their business than they had been three months ago.
Just over half of respondents (53 per cent) were less confident, with 44 per cent as confident as they were when last polled in September.
There was also pessimism over confidence in the overall business sector.
In all, 76 per cent rated the prospects as poor, 21 per cent rated them as average and 3 per cent rated them as good.
On the sales outlook, 58 per cent expected sales to decrease over the December to February period, 26 per cent expected them to stay stable and 16 per cent expected them to increase.
"This is a deterioration on the September survey," Mr Denihan said.
Meanwhile, another survey has revealed a sharp drop in gift-card sales.
Retail Excellence Ireland suggested that some customers were worried about the ability of some retailers to continue to trade in the new year.
The survey also discovered that customers were now looking for additional discounts at the till, especially when dealing with independent retailers.
It also found that cross-border shopping trips were well down on 2009 levels because of the current sterling-euro exchange rate and the adverse weather conditions of last month.
A majority of retailers complained that rents and rates were still too high, while late-night trading had been hit as customers wanted to get home as early as possible.
Retailers expect a fall-off in retail activity from January 10 onwards and hope that a general election might "deliver some consumer optimism".
Meanwhile, retailers have called for planned pay increases for workers that are due to come into force this month to be postponed.
The pay increase of 1.25 per cent is due in the retail grocery sector.
IBEC said retailers would be forced to increase wages at a time when they are facing unprecedented losses.