It's official! Economic report confirms that locally owned shops contribute more and are better for Ireland.

19 December 2011

Jim Power RGDATA photo

The Minister for Small Business, John Perry TD recently launched a report by Economist, Jim Power, into the contribution made by local family owned grocery shops to their local and national economies. The Report, which was commissioned by the independent grocers’ group, RGDATA, with support from Payzone, the consumer payments specialists, contains a number of startling findings;

  • Money spent at a local family owned grocery store goes further for the local economy – in fact it generates over three times more in the local economy.
  • The Independent Retail Grocery & Convenience Sector consists of around 5,000 shops, and is responsible for 93,317 full-time equivalent jobs in the economy and makes a total contribution of €3.6 billion to the Irish economy.
  • The growth of large retail multiples and the significant consolidation that is occurring in the retail sector, is ultimately bad for competition, consumer choice, local employment, local economic activity in general, and the social fabric
  • The retail grocery market in Ireland is becoming increasingly concentrated. The two largest multiples, Tesco and Dunnes Stores now control almost 51 per cent of the market. The other multiples, the German discounters Aldi and Lidl, are also growing market share at a significant pace.
  • Multiples are becoming very dominant nationally and are creating local monopolies across many parts of the country. From the perspective of consumer choice and competition, this is a source of concern and there is a real danger that loosening the cap on retail size will only exacerbate these trends, unless the dominant players in those areas are precluded from further expansion.
  • In an environment where the grocery sector is growing modestly in overall terms, the notion that retail multiple openings will generate net job gains is fanciful. The reality is that jobs created by the multiples largely result in job losses in other retail outlets that are forced to close or cut back on costs in a significant way. Policy makers need to recognize this reality.

Speaking at the publication of “Local Heroes. a study of the economic, financial and social significance of the independent retail grocery sector.” at Donnybrook Fair in Dublin, the Minister for Small Business John Perry TD said: “This Report is welcome and demonstrates the strong contribution that local shops make to local communities and the economy nationally. The dedication and perseverance of business people running locally traded businesses and the positive contribution they make to the lives of Irish people throughout the regions should not be underestimated. They are crucial to the enhancement of Ireland’s overall competitiveness and growth and should not be overlooked.  Small business is not only a vital part of our economy; it is a vital part of our society and every local community. This Christmas I hope that consumers will consider supporting Irish shops and Irish goods and recognise the positive contribution that buying Irish and shopping Irish can make for local communities.”
 
Report author and economist, Jim Power declared: “It is a simple and incontrovertible fact that Irish family owned and run retail grocery shops contribute more and are better for Ireland than foreign owned retailers operating in the market here. The research conducted as part of this study highlights that Irish shops create and sustain more jobs, invest significant amounts in local communities, are the best supporters of local producers and farmers and contribute €3.6 billion to the national economy.”

Speaking at the launch Payzone Ireland Managing Director Jim Deignan said: “As Ireland’s largest consumer payments network, Payzone is delighted to sponsor this report. We recognise the critically important role that Ireland’s unique network of local independent retailers play in local communities all over the country. This report makes a strong business case for support for this vital sector.”

RGDATA Director General Tara Buckley said: “This report clearly demonstrates that if you shop in locally owned Irish shops you are making a significant contribution to jobs in your local community, investment in your local community and growing indigenous Irish enterprises. We all need to don the green jersey this Christmas – spend your money in local Irish shops on Irish goods and you can make a real difference to your own community and to the national economy.”

Key Recommendations in the Report include:

  • Policy makers need to recognize the reality that the arrival of a multiple in an area will ultimately result in a reduction in employment as jobs are displaced in existing retailers;
  • The Retail Planning Guidelines must be maintained and strengthened in order to preserve and sustain community based, owner operated, local shops;
  • The issue of access to credit for small and medium sized businesses must be addressed;
  • The burden of regulation should be reduced by 25 per cent across the board;
  • The burden of local authority charges and commercial rates should be reduced by 15%;
  • Certainty must be provided on upward only rent review legislation as quickly as possible;
  • The cost and logistical factors that result in higher food prices in Ireland must be recognized and addressed;
  • The unconstitutional and outdated Retail Grocery Joint Labour Committee wage setting mechanism should not be reintroduced;
  • Planning and casual trading laws must be enforced. Illegal tobacco and fuel sales must also be tackled.

Read the full report on www.rgdata.ie
For further information contact Cathy Cawley at RGDATA 01-2887584 or email rgdata@rgdata.ie

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