Retailers in the Republic of Ireland have been left disappointed by the Irish government’s emergency budget last week, which concentrated on raising taxes and cutting public spending.
Many retailers had hoped for a cut in the 21.5% VAT rate to boost consumer confidence. But instead Irish finance minister Brian Lenihan announced plans for an increase in income levy as part of a scheme to raise €3.5 billion (£3.15bn) to help the country through the
Louis Copeland, owner of six-store Dublin-based chain Louis Copeland, said the decision to maintain the VAT rate, which is significantly higher than the 15% in Northern Ireland, had been a blow.
“We were all expecting it to come down and it didn’t happen,” he said. “It was a very tough budget when trade is already very tough. We’re about 30% down over the past six months and there are no signs it is getting better. I’m just hoping it’s bottoming out.”
Department store Brown Thomas, which has four stores across Ireland, launched a 20%-off Sale over the Easter break to run until this weekend, with the strapline “Blow the Budget”.
Retail Ireland, which represents retailers in Ireland, said: “The biggest impact for retailers is that the government will be taking more from shoppers who will have a lot less money in their pockets,” he said.
Classic menswear independent Geraghty’s of Galway, which sells the likes of Bäumler, Timberland, Henri-Lloyd and Marlboro Classics, is planning to extend its opening hours in an effort to increase sales.
Sales manager Paul Geraghty said: “We’re going to open on Sundays to get a few more quid in. We’re also going to have some promotions on through the year. There was nothing in the budget to help retailers. They just took money out of people’s pockets.”
Some retailers have lost out due to shoppers travelling across the border to Northern Ireland to make the most of the weak sterling and lower rate of VAT. Northern Irish young fashion mini chain Clockwork Orange said its three stores near the border in Newry, Enniskillen and Derry had seen a surge in sales.
Owner Sam Morrison said: “Our stores near the border had a fantastic Christmas and are still well above last year because of shoppers coming from the Republic.”
However, House of Fraser’s store in the Dundrum Town Centre development near Dublin is also offering an “exchange discount” of up to 15% on many of its lines, including some of its concessions, to eliminate the price differential between the RoI and Northern Ireland because of the depreciation of the sterling compared to the euro.