Makhlouf questions extent of bricks-and-mortar retail post-Covid

Central Bank governor also expresses ‘disappointment’ in FBD over court case

Changing consumer habits due to the Covid-19 pandemic leave a "question mark" over the extent to which bricks and mortar retail will exist after the public health crisis has passed, Central Bank governor Gabriel Makhlouf has said.

Mr Makhlouf, speaking at a Grant Thornton event on Tuesday, was fielding questions on the effect the pandemic might have on property.

“My gut feeling is that we will still have a need for offices,” he said. “There may be a difference in the amount of space we need in those offices, although paradoxically, the old offices where people are crammed together may not be socially acceptable in the future.

“When it comes to retail property, that may be different because I think it is more vulnerable to changing habits of people’s online shopping. I think there is a question mark over the extent of retail and it will be absolutely down to consumers and their habits.



“In terms of residential property, demand is going to continue to be high, but it might turn out to be in different places if remote working becomes the norm. We may find that people want to live outside of central Dublin.”

Separately, Mr Makhlouf said he was “disappointed” with FBD Insurance for its decision to contest whether it was liable for business interruption payments to pubs and restaurants forced to close due to the pandemic.

“I was disappointed [with FBD],” he said. “From last March we identified this as a potential issue. We came to a position where we were very, very clear as to what should happen.

“I regret the fact we have had this process drag on and go through the courts to arrive at an answer. But we have done. To be fair to FBD, they have announced they are not going to appeal it. There is now no excuse not to proceed and pay claims.”

The governor added that the insurance industry ought to “reflect” on its standing in society, and drew a parallel between it and the banking industry.

In terms of the economic recovery, Mr Makhlouf said the patterns suggest it will be “uneven”, and that much will depend on changes to people’s retail habits.

He expressed concern about the impact of remote working on women.

“I am very worried about the impact on women in particular,” he said. “It is still the case that home responsibilities tend to be taken on by women. One hopes that the remote working world is not going to lead to a relapse of the progress we have made.”


Following the UK’s departure from the EU, Mr Makhlouf said there would be opportunities for the Republic, not just in terms of luring financial services from London, but also in terms of attracting investment in the manufacturing industry.

“For Ireland in particular, partly because of the English language, partly because of our connections to the United States, in some ways there are opportunities for the country for investment,” he said.

“The manufacturing that we have seen play such a big role in supporting the economy over the last 11 months is an opportunity for us as a country.

“On the other hand, if you asked me whether Brexit was worth it for Ireland, my views are undoubtedly no. Ultimately everyone is a loser with the UK’s departure from the EU. What we are trying to do is minimise those losses.”

The governor was also asked about concerns that the State’s bumper corporation tax receipts are too dependent on a small number of multinationals.

“The reality is we as a country and the State’s finances have been helped by the success of the multinationals over the last year,” he said.

“The exports they have made and the profits they have made have paid their corporation tax and that has helped the State pay for the supports through this pandemic.”

He added that the debt the State has taken on to deal with the pandemic is “absolutely warranted” to avoid long-term scarring affects on the economy and wider society.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter