Business

Retailers in south fear loss of trade to Northern Ireland following Brexit

Border town centres, such as Dundalk, could suffer as a result of Brexit, it has been claimed

THE body that represents small and medium firms in the Republic has called for a rates rebate for retailers in the border region following the Brexit vote.

The Irish Small and Medium Enterprises Association (ISME) warned of the negative effect of the sterling devaluation retailers in the border counties of the Republic coupled with creeping business costs and zero inflation figures.

It wants a "root and branch investigation" into retail costs to be carried out by the Republic's National Competitiveness Council.

ISME chief executive Mark Fielding said: "With Sterling dropping to a 31 year low this week, retailers along the border are already experiencing the negative impact of Brexit.

"This increase in northbound cross-border shopping for everyday items such as groceries and fuel will place border county retailers in jeopardy.

"ISME is calling on government to initiate a commercial rates rebate for the duration of the Brexit currency devaluation."

Mr Fielding was commenting after official figures showed retail sales grew by 8.1 in volume over the past year - but by just 5.3 per cent in value.

And when data from the motor trade was excluded, sales were 6.5 per cent higher in volume and 3.9 per cent in value in May compared to the same month last year.

Merrion economist Alan McQuaid said that spending was "quite robust" over the first half of the year.

But he said the Brexit vote would likely have a negative impact on consumer confidence south of the border.

"A sharp fall in the pound may well entice Irish shoppers to spend in Northern Ireland," he added

Mr Fielding added: "The retail sector continues to struggle. Despite strong economic growth, value for money is still the key determinant for Irish consumers.

"In addition, retailers face increasing cost pressures, from the knock-on effects of the minimum wage increase, bank interest and charges and insurance. In addition border based retailers have now to deal with the sterling devaluation and their shops and jobs must be protected".

Mr Fielding said in addition to low margins, retailers were suffering due to negative cross border trade, "excessive retail business costs, commercial rates, development charges, wages and insurance".

"The SME retailer is caught between rising costs and reducing margins leading to continuing pressure on an already reduced bottom line," he said.

"Border retailers have the added challenge of a sterling devaluation. With recovery in retail still fragile, any increased costs will further de-stabilise a sector which has endured a torrid eight years and remains significantly challenged. Government must address costs and assist border county retailers."

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