Ibec warns of instability following Brexit vote
Retail Ireland, a division of Ibec representing the retail sector, has warned of the possible effect Britain leaving the EU would have on Ireland.
Print11 May 2016
As the 23rd June referendum on whether Britain should remain a member of the EU looms, business groups in Ireland have said that such a decision would have a significant effect on consumer confidence in this country. According to Ibec, a leave vote would lead to a weakened Pound and an increase in cross-border shopping, causing a setback in Ireland’s recovery.
According to Retail Ireland, a division of Ibec, the retail sector is particularly exposed. With many major UK stores having outlets in Ireland, the two economies are “intrinsically linked”, the group says, while the ease of travel across the border means consumers could quickly divert spending to Northern Ireland if the currency market is affected.
Meanwhile, the group’s quarterly Retail Monitor has been published, outlining growth in the retail sector for Q1 of this year. St. Patrick’s Day and an early Easter drove sales growth, but an uncertain international market suggests that further growth as the year progresses is not a sure thing.
“The recent decline in consumer sentiment reflects concerns about external risks including Brexit,” said Retail Ireland director Thomas Burke. “For Britain to exit the EU single market post-Brexit would furhter increase the likelihood of the reintroduction of a border between Northern Ireland and the Republic, adding additional barriers to trade.
“This is a deeply worrying prospect for any retailer operating across the British and Irish markets,” Burke said.
Other key retail trends set out in the Retail Monitor include:
Meanwhile, the organisation’s Retail Monitor made these other observation:
· Supermarkets and convenience stores: The growth of supermarkets and convenience stores has finally permeated into a stubbornly flat sector, leading shoppers to seek out more deals and adjusting their shopping patterns to avoid price increases.
· Service stations: Unleaded petrol sales continued to fall during Q1 2016, while diesel sales increased, illustrating the ongoing migration from unleaded to diesel vehicles. Overall volume growth also suggests an increase in the numbers of cars on the road.
· Pharmacies: The sector grew by 4.4% in value terms in the quarter and 6.3% in volume, reflecting both the price competitiveness of the sector and reductions in the reimbursement costs of medicines.
· Department Stores: The landscape for Department Stores has changed dramatically in recent months with a number of high profile establishments closing their doors. This has led to in-store innovation and new formats. Beauty has been performing very strongly, as has lingerie.
· DIY and hardware: Q1 2016 finished positively for the DIY, home and garden sector, with early season momentum aided by the long school break for the combined St. Patrick’s Day and Easter season.
· Books, newspapers and stationery: The book, newspaper and stationery market has seen robust value growth of 7.7% over the first quarter, driven by a stabilising book market, sterling inflation against the euro and the positive impact of the 1916 commemorations.
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