Comment: Retail sector struggling to survive

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Retail and wholesale outlets are going to the wall at a rate of one every two days.

Retail and wholesale outlets are going to the wall at a rate of one every two days.

That stark statistic was thrown into sharp relief once again last week in the wake of the judgement in favour of the owners of Bewleys on Grafton Street over upward only rent reviews.

The Bewleys case, and judgement, put the spotlight once again on the seemingly anachronistic practice of upward only rent reviews, at a time when the retail and wholesale sector is struggling to survive.

A combination of factors, well known and obvious are contributing to the wipeout currently taking place.

Upward only rent reviews are definetly a factor and they have been a bone of contention for a long time.

However, legal experts have warned that the Bewleys judgement will probably not set a precedence, and pave the way for a reduction for retail businesses paying Celtic Tiger era rents.

The case is been interpreted as more of a stand alone, rather than the panacea to the high and ridiculous rents that apply in most instances for business and retail interests.

This is unfortunate, considering the high rate of attrition that is taking place.

The latest monthly figures from Vision-net the business and credit risk analyst, bear this out.

These show that a total of 120 companies were declared insolvent over the past month, working out at five on a daily basis.

The retail sector is taking it on the chin.

The rosy tinted rhetoric of touring Ministers on St Patrick’s Day, that the economy is picking up has a hollow ring to it, when one considers the struggle for survival many of small, and not so small, businesses find themselves in on a daily basis.

Furthermore, retail sales remained flat in February, according to the Central Statistics Office.

Retail Excellence Ireland has called on the Government to take immediate action and implement practical measures to aid the struggling sector.

Clearly, something needs to be done.

Unfortunately, though, the signs are not that positive. Consumer spending will continue to be dampened down while most people adjust to tighter budgets and more taxes.

Austerity has a real cost, and while positive talk and news on the broader economy is to be welcomed, it should not be overstated.