It is indisputable that retail globally is in a state of flux, but what are the key challenges facing the retail sector and how are they being addressed?
I recently attended a Global Retail Council in New York and across fifty countries worldwide the issues being identified are the same. Migration of spend online, taxation equity and the non-application of VAT and customs duty on internationally bought goods, the need to rethink bricks and mortar and the significant war for talent in retail.
Interpreting these issues for Ireland, some things remain very clear. Approximately €6 billion will be spent online by Irish citizens in 2019. Of this over 70% will leave the country to such websites as Amazon.co.uk. This might be seen as a challenge by many, and don’t get me wrong it is a challenge, that said, Irish retailers can also use online to internationalise and take on the world. Across Europe in 2019 €650 billion will be spend by EU citizens. Irish merchants need to become more ambitious in their sales strategy and endeavour to sell into international markets. Here to fore there has been no specific Governmental support provided to retailers. That changed in late 2018 when Enterprise Ireland announced a €1.25m fund for merchants with international online potential. We understand that this fund has been oversubscribed and that phase two funding is likely to be announced in March.
Retail sales were reported to be trading like for like down in Q4 2018, with VISA suggesting that ‘face to face’ shopping was back 4.5%. This is a concern for all towns and cities across the country. Without footfall, retail and hospitality operators will struggle. In that regard local Government and business stakeholders need to work together to stem the tide. We need to work on three pillars of successful town and city revival.
- We need to do everything possible to deliver the very best retail and hospitality offer;
- We need to deliver public realm standards that are impeccable. In that regard, we need to look at the standards that Kildare Village deliver and aim to achieve this standard and finally;
- We need to improve our citizen engagement and give people great reasons to visit towns and cities. This might involve events and festivals which always have a hugely positive impact on footfall and spend.
Which brings us to Dublin City. I would suggest the outlook generally for Dublin is a positive one. The retail mix and footprint is world leading and Dublin remains a primary destination from a city break perspective. That said some issues exist. The primary issue is accommodation costs in the city and suburbs. We have many members who are reporting staff requests to leave the city and be transferred to other stores around the country. The reason? Accommodation costs.
Many cities around the world are embracing the consumer trend where people want midweek convenience and weekend experience. In that regard, Dublin City needs to be as accessible and frictionless as possible and also consider building meaningful weekend experiences. The city must also embrace the visitor opportunity. While more hotel bedrooms are in the pipeline, the city needs to work hard to capture as much visitor spend as possible. In that regard, Retail Excellence has been calling for the implementation of coach parking facilities in places such as Nassau Street. This would greatly increase the productivity of the street curb, stop long-term parking in the area and ensure that visitors are dropped off in the inner core of the city.
The future offers many challenges but should all stakeholders come together, manage the city as if it were Kildare Village or any other professionally managed retail scheme, I am sure the capital has a very bright and prosperous future