Call for State to support retailers in battle against online giants

Ireland’s town centres will struggle to survive if businesses do not get the support of the State in their fight against online giants, a leading retailing group has warned.

Lorraine Higgins of Retail Excellence Ireland said the threat posed by online operations overseas has been growing for more than a decade, and she expressed concern that unless there was some degree of State-intervention many indigenous businesses that make the Republic's retail space unique would shut.

Less than 30 per cent of Irish retailers have an e-commerce capability on their websites, and 22 per cent have no online presence at all.

She said the numbers highlighted the size of the challenge many retailers face if they are to survive, and she called for State support for small enterprises seeking to build websites to compete against overseas competitors.

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She was speaking in the wake of the closure last month of a branch of the Walton’s music shop on Dublin’s South Great George’s Street.

The music shop will concentrate much of its business on its branch in Blanchardstown,Dublin, and its managing director Niall Walton said competition for the virtual world was – at least in part – to blame for the move.

Turnover

“The internet is taking away a lot of business from the music industry. People will buy anything online, so the turnover goes down in general because of online shopping; and on top of that the rents go up.”

Ms Higgins said the Waltons experience was one which had been shared by retailers all over Ireland for more than 10 years.

"It shows how difficult retail is for businesses with the migration of consumer spending online and the plethora of cheap exports from sites based outside of the European Union.

“Consumers see a huge price differential between online and bricks and mortar shops, but many of the prices that we see online do not include VAT or duty and seem much cheaper. Around two-thirds of consumer spending is leaving the country every single day, and that presents a massive challenge to the retail industry and to Revenue.”

She said the move online would “lead to shops closing, and that will obviously have a knock-on effect on the quality of our towns, and the quality of the experience people have when they go into our town centres”.

Streetscape

Thomas Burke, the director of Retail Ireland, the Ibec umbrella group for the industry, said the Waltons move was "desperately sad. It has been a part of our streetscape for so many decades."

He predicted that there would be more such moves and more closures, particularly in the retail sectors “where they have to discount heavily to drive footfall”.

However, he was not entirely negative about the future for retail in the Republic. “I see it as a glass half full kind of situation. Shopping is not just the transaction, it is a past time and it is a social activity, and I think retailers need to take advantage of that fact they do not have to just go toe-to-toe with the big online retailers on price and can offer something a bit different.”