Spirits were high among retailers on Monday as the “non-essential” part of the retail sector fully reopened. When the sugar high or novelty of having customers to serve wears off, however, the sector will still face significant challenges and will probably require ongoing State support.
While most shopping centre traders are likely to recover their revenues quite quickly as consumers sate pent-up demand, so-called high street or town and city retailers face a bigger challenge. The latter are partly dependent upon foreign visitors and also office workers popping to shops on their lunch breaks and on the way home. There is, as yet, no visibility on when those two cohorts are likely to return.
Ibec, the employers lobby group, said on Monday that a survey of its members suggests three-quarters will bring workers back to the office within the next three months if Government guidelines allow. Up to 80 per cent, however, will operate a hybrid model to allow staff at least partially work from home, so there will be an ongoing impact on city centre retailers and perhaps a structural change affecting them.
International tourism won’t return for several months and won’t return in significant numbers until next year at least.
Last month, Ibec's Retail Ireland chairman, the Maxol chief executive Brian Donaldson, wrote to Taoiseach Micheál Martin asking for further State support for the sector. The letter, seen by The Irish Times, called for measures including the extension of wage subsidies, a ban until summer 2022 on landlords evicting retail tenants over rent arrears, and forbearance from the Revenue on the collection of State taxes from retailers.
With the reopening, consumers are back in the game. But the retail sector is nowhere near out of the woods. Structural changes may yet emerge in consumer behaviour. One way or another, the retail industry’s fortunes will be dependent upon the Government for a long time to come.
