Retailers' confidence hit by Stormont impasse
The economic uncertainty created by political stalemate at Stormont is having a knock-on effect on retailers, according to a leading trade organisation. The Northern Ireland Retail Consortium says it's encouraged by strong UK trading data for September, but worried about the long-term future for the sector here.
KPMG Sales Monitor said like-for-like sales lifted 2.6% compared to September last year, the fastest growth since January 2014. Total sales in the month rose 3.9% year-on-year, driven by the Rugby World Cup and a shift in the timing of Bank Holiday revenues.
British Retail Consortium director general, Helen Dickinson, said: "September was a bright month for retail, with the strongest sales performance since January of last year, excluding Easter distortions. However, sales growth was boosted by the August Bank Holiday, which fell in this period, as opposed to August last year, shifting back-to-school sales into September, so such strong growth is likely to be overstated."
The Rugby World Cup - in common with other major sporting events like the World Cup and Olympics - is credited with boosting sales of beer and convenience foods as fans enjoy the celebratory atmosphere of the games.
"Those figures are encouraging, although there is no specific monitor for Northern Ireland," said Aodhan Connolly, director of the Northern Ireland Retail Consortium (NIRC). "Retail is going through a very challenging time here. Footfall is hugely volatile, as is consumer confidence. And the political situation is having an effect on business confidence, especially when there are so many things we need to work on together."
Mr Connolly said the biggest disincentive to investment and growth at present is the issue of business rates. "Unless urgent action is taken to fundamentally overhaul the system, by 2017 Northern Ireland will have the highest business rates in western Europe.
"We were very encouraged by the series of 'Innovation Labs' held by the Department of Finance in June, when various sectors were invited to give their ideas on business taxes here. There's a consultation due to open before the end of this month on business rates, but if the five main parties aren't talking to each other, there will be no consensus and no progress."
Mr Connolly said there was also frustration about the delay in implementing a reduced rate of corporation tax in Northern Ireland. "Major retailers are making decisions at the moment that won't be felt for 24 to 36 months. They need certainty and that is lacking at present."
Looking ahead, David McCorquodale, head of retail at KPMG, said: "Moving into the final quarter of 2015, retailers will be keeping a watchful eye on Christmas, with the launch of festive campaigns starting to whet consumers' appetites and Black Friday expected to be big again."