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2|Retail News|April 2019|www.retailnews.ie

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Retailers Angry Over Rates Hikes AS retailers experience rising rates bills, as part of a nationwide revaluation process, Retail News asks if the system is in need of reform. 10 years ago, Peter Gaughan undertook a €750,000 revamp of his petrol station and shop in Balla, County Mayo. The Spar shopkeeper demolished the forecourt and built a bigger outlet on the same footprint in an attempt to improve his business. When the Valuations Office took note of his renovations, however, they doubled his rates, according to Gaughan. “This is just one scenario where you get punished for investing in your business,” he told Retail News. It's a story that retail representatives hear a lot. “A store owner increases the visual amenity in an area and they are hit with an increased valuation,” said Vincent Jennings, Chief Executive of the Convenience Stores & Newsagents Association (CSNA). Tara Buckley, Director General of RGDATA, also has members “who have purchased an old derelict building, renovated it, spent money on it, and turned it into a business as shops close all around them in the town. Then the rates bill arrives through the door. When they are among the last people standing, keeping the town alive, their rates bill jumps up.” The thorny issue of rates is back in the spotlight in 2019. Local authorities around the country are revaluing commercial properties as part of the first National Revaluation Programme in over 150 years. Thus far, the programme has been completed in counties that include Carlow, Kildare, Sligo, and Dublin. Attention is now turned toward Cavan, Louth, and Wexford, amongst others. But the process appears to be driving massive hikes in rate bills. Vincent Jennings, Chief Executive Thomas Burke, of the Convenience Stores & Director of Retail Newsagents Association. Ireland, has received reports from his members about increases in the order of 50% to 60%. “It's giving a real headache to business operators from the perspective of trying to foresee what a bill may be in a given year,” he said. RGDATA members are experiencing the same concerns. “They are frustrated about paying high commercial rates when the towns are not being managed properly,” said Tara Buckley. Retailers believe that rates are inconsistent with business. “At the moment, the rates are based upon the rentable value of the shop, which is very arbitrary,” said Gaughan.

According to Jennings, “a multinational who uses a building as an extension of its own brand should have a different value on their high street property than a person selling newsagent products. Somebody who has 2,000 customers a week is in a different position to someone has 200.” Buckley continued: “A convenience grocer needs to have a certain amount of square footage. Immediately, they are going to be at a disadvantage to other retailers in the town because they have a bigger space, even though their margins are extremely tight. Upstairs could be an online business. They are paying tiny rates because they only need a small space, but they could be turning over a huge amount of money.” “It's not an efficient system,” said Burke. “It's an opaque system. These anomalies on paper are having a real impact on the viability of our member companies and their businesses all over Ireland.” How are commercial rates calculated? The valuation of the property, known as the Net Annual Value (NAV) is multiplied by an Annual Rate on Valuation (ARV), which is set by local authorities. Retailers contend this system does not take into account the needs of individual properties, which may be subject to rent reviews. Retail Tara Buckley, Director Ireland has called for a centralised General of RGDATA. collection agency to collect rates, bringing a national perspective to the problem. Retailers suspect the system unfairly disadvantages their businesses, and their rates are being increased to make up for non-payments. Less than 80% of commercial rates are collected nationally every year, leaving a hole of around €200m, according to Burke. “That drives inefficiencies in the system. People pay more than they should because they have

Profile for Retail News

Retail News April 2019  

Retail News, is Ireland’s longest established FMCG B2B magazine. It has been around for over 60 years, from the birth of the supermarket, th...

Retail News April 2019  

Retail News, is Ireland’s longest established FMCG B2B magazine. It has been around for over 60 years, from the birth of the supermarket, th...

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