Retail lobby group seeks pause on minimum wage hikes
Retail Excellence Ireland highlighted how the statutory minimum wage increased by 38 per cent from January 2020 to last January climbing from €9.80 to €13.50 and noted it was the second highest minimum wage among EU member states.
It also pointed out that Ireland has the seventh highest standard VAT rate and the highest electricity prices for non-household consumers in the EU27 last year with prices here was 62.3 per cent above the EU average.
It pointed to PwC's latest Insolvency Barometer which suggested there were 852 insolvencies in 2024, 16 per cent higher than the 734 insolvencies in 2023 with retail recording the highest number of insolvencies of any sector in 2024.
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It called for the reintroduction and expansion of the Increased Cost of Business (ICOB) scheme, which allocated €257 million for SMEs in October 2023 as part of Budget 2024.
The scheme offered eligible businesses a one-off grant payment as a contribution towards business costs based on the value of their commercial rates bill. The scheme was closed in May last year.
REI welcomed the Government's decision to pause the introduction of the living wage until 2029, saying that the methodology for its calculation needed to be revisited. Ireland's status as an outlier in the EU due to our significantly higher number of high-paid jobs in sectors such as pharma and tech is skewing the data and is not truly reflective of the broader economy.
The umbrella group's chief executive Jean McCabe said the report 'outlines in grim detail the intensely difficult challenge facing Irish retailers today. Not only is Ireland one of the most expensive places in the EU to do business, we also live in a global economy so the retail price of goods sold here needs to be competitive. This means Irish retailers' margins are just being consistently squeezed, with little to nothing left for many. Hence, we see doors closing across the country.'
Jim Power, economist and author of the report, highlighted a 'massive escalation in the costs of doing business, including energy costs, insurance costs, labour costs, and compliance costs' and said retailers are generally very labour intensive, so labour costs and other labour market regulations in areas such as paid sick days and parental leave impose an inordinate financial and logistical burden.'
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