Despite a largely positive economic environment, Ireland’s retail sector continues to face challenges, including higher costs and the rise in retail crime. “Last year was somewhat disappointing for retail,” says Arnold Dillon, director of Retail Ireland, the Ibec industry group representing the retail sector. “Retail businesses faced significant challenges carried over from the cost-of-living emergency which impacted consumer sentiment and spending. Business has been improving, but it hasn’t reached the levels we would have liked.”
The industry did finish 2024 in a better position than where it started thanks largely to a better Christmas than expected, he adds.
The outlook for 2025 is reasonably positive, he believes. “The economic fundamentals are strong, we have a rising population, a very strong labour market, and we’d like to think consumer sentiment will continue to improve,” says Dillon.
Global events cannot be ignored, of course. “While retail is not at the coalface of the global trade disruptions, these things do affect consumer confidence. Hopefully they won’t weigh too heavily.”
Here at home, he points to rising costs of doing business and retail crime as two challenges which need to be addressed with some urgency. “Many retail businesses are still trying to grapple with the cost increases of the past few years. It is a very labour-intensive sector, and pay cost increases are felt disproportionately.”
Pay increases are just part of the story, however. Government-mandated increases in the cost of labour, including enhanced sick-pay entitlements, an increase to the minimum wage and the introduction of auto-enrolment pensions later this year form a significant component.
“We have seen some positive if not very specific commitments to addressing the issue of rising costs in the Programme for Government,” he says. “We will pick that up with Government when it comes to the roll-out of any further cost-increasing measures. The capacity of businesses to absorb the increases and operate effectively must inform the approach.”
Amendments to the law are required to protect retail businesses from spurious claims. Retailers can spend an awful lot of money defending such claims with no prospect of recovering their costs
— Arnold Dillon, Retail Ireland, on defamation law
The increase in retail crime and harassment of retail staff is of acute concern to members, he adds. “Crime has always been a challenge, but it has increased significantly in the last number of years. This is not unique to Ireland, and we see it in many other countries. During Covid there was much greater focus on the welfare of employees, and retail businesses still want to do all they can to support employees.”
Retail businesses are addressing the issue through staff training and investment in technology and other measures, Dillon continues. “There is a body of work to be done by the Garda and Government as well. There is a commitment to resource the Garda in the Programme for Government as well as to look at the issue through the introduction of new laws on things like exclusions orders. The proposed new offence of assaulting or threatening a retail worker in the Protection of Retail Workers Bill is very welcome.”
Defamation law is another thorn in the side for the industry. Retailers have faced defamation litigation from people who claim to have been wrongly accused of shoplifting, he notes. “Amendments to the law are required to protect retail businesses from spurious claims. Retailers can spend an awful lot of money defending such claims with no prospect of recovering their costs.”
Skills development is another issue high on the industry agenda. “We spend a lot of time and energy on this at Retail Ireland. We run an apprenticeship programme and an industry focused Skillnet. We want to make the industry an attractive career option for people. The retail sector is the largest private-sector employer in the country with over 320,000 people employed. There is wide variety of career options open to people, not just traditional customer service roles.”
The sector also plays a key role in the social fabric of the country, he adds. “The industry operates in every single village, town and city across the country. Its contribution is felt by everyone in some way. It supports communities around the country through support for sports and social clubs and so on, as well as through employment close to where people live. The issue for wider society is how to ensure we continue to have vibrant town and city centres well served by public transport, and with a safe environment for people to live, work and go shopping in. Parts of Dublin city centre present particular challenges in that regard. We need to focus on what can be delivered in a short timeframe and improve the experience for everyone.”
