Londis retailers call for Government support to reduce crippling costs
ADM Londis' Stephen O’Riordan, believes the Government needs to abolish inflationary JLCs, reduce local authority charges and purge excessive regulations
11 October 2010
Following a survey of ADM Londis retail members as part of the Group’s 2010 Annual Retailer Conference, the need for Government intervention to provide more support to address business input costs such as wage costs and local government charges was seen as vital.
Nearly two thirds of retailers surveyed detailed intense competition within the marketplace as the biggest challenge facing Irish grocery retailers with customer retention, cash flow management and additional cost reduction identified as the three most important areas of focus for independent retailers.
As an example of how highly competitive the grocery retail marketplace currently is, almost all of the retailers surveyed (96%) revealed that consumers are purchasing a higher percentage of grocery shopping ‘on promotion’.
Almost two thirds of Londis retailers surveyed called for Government support on the issue of wage costs. Reinforcing the points made by the RGDATA report ‘The Economic & Financial Significance of the local shop’ released earlier this year which highlighted the need for the abolition of the Joint Labour Committee (JLC) mechanism for fixing wages in the grocery sector. The existing JLC system raises retail wage rates by up to 25% higher than the national minimum wage.
Stephen O’Riordan, chief executive, ADM Londis plc said: “In our survey almost 90% of retailers believe that it will be the second quarter of 2011 and beyond before the Irish economy returns to growth. In a retail industry where the fall in value of overall retail sales in Ireland is estimated to be in excess of 20% since market peak it is essential that the Government addresses the needs of small business by abolishing inflationary JLCs, reducing local authority charges and purging the excessive amounts of ‘red tape’ and regulations imposed on independent retailers.”
With price identified as the most important driver for consumers, over half of retailers referenced the availability of private label goods as being very important for their businesses to remain competitive.
Peter Foley, commercial director, ADM Londis said the business was working closely with a range of suppliers in Ireland and internationally. “A major development in 2009 was the establishment of a strategic alliance with UK wholesaler, Nisa Today’s. This alliance delivers in excess of €6 billion buying power to retail members, whilst also bringing one of the most credible private label offerings in the sector to Londis’ consumers.”
Over 300 delegates attended the Londis Conference in The Radisson Hotel in Galway on 28 September. Delegates listened to presentations from Gerard O’Neill, chairman of Amarach Research, David Sands, UK retailer and member of Nisa Today’s Retail Council and James Burke, leading consultant and retail advisor.