The only way is up
ShelfLife editor Fionnuala Carolan examines reasons to be cheerful, despite the challenges which have faced the retail sector of late
Print12 May 2010
Positive figures cited by the Central Statistics Office were a welcome relief this month. This is the first official sign of growth in the economy for over two years, which is a considerable milestone. Predictions of like-for-like growth for quarter two of this year suggest the industry may have finally reached the bottom. As 80s pop singer Yazz would say: the only way is up.
Another positive turn of events is news that the number of shoppers travelling north is finally diminishing. Only a few months ago it seemed like a near impossible feat to stem the tide of cross-border shopping but a couple of significant developments have convinced consumers to start spending closer to home. The first change came about when the multiples introduced price cuts on food in border stores and subsequently in multiples throughout the country. Then there was the December budget. The cut in duty and Vat made alcohol more affordable. While the Irish Vat rate decreased by half a percentage, the UK Vat rate increased, bringing prices more into line than they had been in years. While we are far from out of the woods yet, these incremental changes are a good reminder that everything is cyclical. No matter how bad things have become, the cycle will eventually end and we will return to growth, albeit slowly.
Gillian Hamill’s feature on page 18 documents the rise of the central distribution model through the multiples in this country. Dunnes finally succumbed and it is now moving closer to full central distribution but with every advance action comes a negative reaction and with central distribution the independent sector is the one to bear the brunt due to the reduction in frequency of supplier direct deliveries into towns. This in turn reduces in-store availability. These retailers will have to make alternative arrangements to source certain goods as the brands align themselves to the central distribution model. On the upside the advancement of central distribution also creates employment. Barry’s has only recently created 25 jobs with the huge extension to its central distribution centre in Mallow. Whether you like or loath it, central distribution has arrived so it might be an idea to jump on that bandwagon.
And finally, the longer evenings and the intermittent sunshine should be making you think about the season ahead. The World Cup in June is sure to generate a huge spike in business for the drink and barbeque brands. It would be wise to take advantage of any marketing aids available to remind consumers to stock up in time for the big occasions ahead.
Fionnuala Carolan
Editor
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