IBEC - Newsroom

Retail Ireland, the IBEC group that represents the Irish retail sector, today (Friday 16 October 2009) said that new CSO retail sales figures show the sector remains under serious pressure. The group called for a major reduction in excise duty and VAT from November 1, in advance of the busy Christmas shopping period.

Retail Ireland Director Torlach Denihan said: “The value of core retail sales, excluding car, fuel and bar sales, was down -9.7% in August, whereas sales volumes were down -4%, showing how prices have been cut across the board. In other words, consumers got more for their money.

"Food sales are still in negative territory compared to last year, as are virtually all other categories of goods. There is some slowdown in the colossal declines in sales volumes in furniture, lighting and hardware experienced in recent months.

“The continued weakness of sterling poses a major threat to the retail sector in the run up to Christmas. We estimate that cross-border shopping costs the Exchequer €430m and that it is too late to wait until budget day to tackle this. We advocate that from 1 November Government take pre-emptive action by:

• reducing the excise levels on alcohol by 20% because alcohol is the single biggest motivation for cross-border shopping trips. We have the highest excise in Europe for wine and the second highest for beer and spirits. The North now accounts for almost half of all alcohol sales on the island because of cross-border shopping and the imbalance needs to be rectified.
• reducing VAT to 18% to stimulate retail sales. The public are now saving 12% of disposable income and they need to be encouraged to spend some of this to create employment and give the economy a boost;

"We also urge that the political parties ask their councillors to cut commercial rates by 20% when they vote on Local Authorities to set annual rate on valuation over the coming weeks," concluded Mr Denihan.