Irish off-licences, like many Irish retailers, are under increasing pressure to survive in the current economic climate. Sales have fallen, costs and taxation have risen and customers are uncertain about their future.
The value of retail sales in May fell by 19.4%, compared to sales in May 2008, while sales of alcohol fell by 17% in the first quarter of 2009. Revenue data shows a 19% decline in the sale of spirits, while beer sales fell by 12% and wine by 11%.
Although the exchange rate is not as attractive as it has been, lower UK VAT and excise duties have ensured that Republic of Ireland consumers continue to cross the border for a great deal of drink purchases.
The rate of unemployment rose to 12% in June with another 11,400 people joining the dole queues; up 92% on the same period last year. The ferocity and suddenness of these employment figures can be seen when one considers that the level of redundancies in 2009 is already up 160% on 2008 figures. Increasing numbers out of work means less cash being spent in Irish shops, while those with jobs have trimmed their spending to cope with increased taxation or as security against tougher times.
Several big name retailers have either closed outlets or been forced out of business. There is no doubt that the retail landscape will continue to change and some independent off-licences will not be in business in 2010, despite any promise of green shoots of economic recovery.
The words of the song ‘Only the strong survive’ may prove prophetic for the times in which we find ourselves. Having a strong underlying business certainly offers a greater chance of survival in tough economic conditions. However, there are also decisions and actions that independent operators can take to safeguard their businesses. Being a member of the National Off-Licence Association can provide many trading benefits, both obvious and subtle, to greatly strengthen the hand of any independent off-trade operator.
Being part of a recognised trade organisation provides access to discounted schemes covering insurance, pensions and other services. NOffLA also provides strong, and mutually beneficial, relationships with key suppliers with exclusive special offers to distinguish a NOffLA outlet from other retailers and provide real competition to the multiples. More important, NOffLA members have access to the knowledge and experience of the other 330 members. Whatever situation an outlet encounters, another member has had a similar experience and is ready to provide advice and assistance.
The key to survival, and success, is in the strength of the association’s collective experience and expertise, all of which is available to each of the 330 members of the National Off-Licence Association – just ask.