Retail News|January / February 2019|www.retailnews.ie|15
The Retail News Interview livelihood of thousands of independent retailers who rely on these groups to increase their buying power against multinational global corporations,” Burke stresses. Retail Ireland are not opposed to the Unfair Trading Practices legislation in principle, but believe, as do most commentators, that it doubles up on Ireland’s own Grocery Goods Regulations (GGRs), which were introduced in 2016 with the aim of producing trading transparency between retailers, wholesalers and suppliers in Ireland. Burke believes that we need to give the GGRs a period of five years to bed in, before we examine how effective they are and that the UTP legislation is another layer of unnecessary red tape: “We always believe that the best place to deal with issues facing the Irish retail sector is in national legislation in the first instance, because that way you can nuance it to reflect the Irish retail environment and not try to implement a one size fits all approach in order to try to fix the problems of the European retail industry.” The Competition and Consumer Protection Commission (CCPC), who are currently responsible for policing the Grocery Goods Regulations, have called for the establishment of an independent grocery regulator, which the Retail Ireland chief has concerns with: “I don’t believe that the case has been made sufficiently for the establishment of a standalone grocery regulator in a country of five million people. I don’t see why CCPC can’t continue to do the job they have been doing up to now. I also have a concern that they would expect industry to pick up the tab for the establishment of that body, when we are already paying significant taxes and overheads.” Indeed, Retail Ireland have a real worry about the growing burden of compliance on retailers, particularly in the grocery space: “We’ve seen the Public Health (Alcohol) Act and what retailers will have to do with store formats; there are all sorts of food safety regulations; post-Brexit, are we looking at an additional layer of red tape for grocery retailers? I am concerned, given the overall environment and the cost base challenge, that the burden of regulation doesn’t grow any further because it is pretty significant already.” Town Regeneration Retail Ireland were part of the retail consultation forum which developed a framework on town centre renewal, a roadmap to how towns can work with their local authority to access funding
to improve the streetscape, to make town centres a more attractive place for consumers, for businesses and for people to live. “I think Government understand the challenge and have started to address it. But I don’t think enough has been done yet,” Burke maintains. The main problem is finance, he believes: “While the Government have allocated a dedicated fund for this, it’s nowhere near the level that is required, so we believe they need to start putting serious financial weight behind this, because there are town centres around the country that are struggling. Also, local authorities need
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I think we will see huge pick-up in the rate of consumer acceptance of grocery shopping online… because consumers are more time poor than ever.
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to look at how they enable and support the community with drive and oversight: it has to be a strategic approach.” Grocery: The Ultimate Competitors When it comes to Irish grocery, Burke describes the level of competition as “intensely competitive”, citing the deep discounting across a host of big categories across the Christmas period. “Discounting has been a consistent feature of the Irish grocery market over
the last 10 years, with retail prices now back to 1999 levels. This brings its own challenges, because sales value growth is now being outstripped by growth in input costs, and all the time margins are being squeezed. We have a consumer that has been dramatically changed in recent years: they are obsessed by value and are willing to move for relatively small amounts of money. Brand loyalty has effectively disappeared, and consumers are hopping around between the various players in the market looking for the best price and the best value.” The conundrum for retailers is that while consumers want value, they also seek ethically and sustainably produced goods. So how does the retail trade cater to the needs of the consumer in 2019? “It’s very difficult because consumers want it all but they’re not always willing to pay for it. In some instances, they are speaking out of two sides of their mouth,” he smiles ruefully. Remaining competitive price-wise while giving consumers what they want and differentiating yourself from the competition is a real balancing act, Burke admits. One area where he foresees big growth in 2019 is in the area of online grocery shopping. “I think we will see huge pick-up in the rate of consumer acceptance of grocery shopping online. Most of the big players have a compelling offer in place: they’ve been refining it for years, but they’ve got it right now, so I think this year it will really take off, because consumers are more time poor than ever,” he notes. Some stores have trialled clickand-collect of grocery products, which will grow in popularity. Indeed, some stores even introduced a service whereby commuters could collect their groceries at busy urban rail stations, but Burke feels we are still a couple of years away from this being a mass market trend. However, he believes that the growth in online shopping will be mirrored by a corresponding growth in convenience shopping. “I think convenience stores will have a bigger role to play,” he states. “Regardless of what happens with the weekly shop, we will see an expansion into new formats in convenience over the coming year.” So, 2019 will be a challenging year, but also one with opportunities for retailers smart enough to lead the way…