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Our Economy – What Happens Next?
For the past number of days, the team at Retail Excellence has been in communication with retailers and retail associations across the globe. It is clear that we will now enter a two-step economic journey:
Step 1: “The Pent-up Demand Phase” – As retail reopens it is likely that consumers will demonstrate pent-up demand in certain product categories, will shop very functionally and cautiously off pre-decided shopping list. There will be no browsing, conversion ratios and basket sizes are high. The net impact on retail revenues generally is that across most retail sectors revenues will trend at anywhere from +10% to -15% over the first two to three weeks of reopening.
Step 2: “The Subdued Demand Phase” – After the pent-up demand phase, it is likely that consumers will return to hibernation. This is the subdued demand phase. Due to health and safety and financial prudence consumption decreases exponentially. Overall retail revenues will fall between -15% and -40%.
Worst still, micro economies, cities, towns and villages whose local economy is dependent on a functioning tourism market will contract significantly. In those economies most workers are now unemployed. Across the globe those economies are experiencing retail sales contraction of between -40% to -70%.
Message to Government:
The business support measures announced by Government to date are not fit for purpose. We urgently require:
- A commercial rent grant equivalent to 60% of the rent payable during the period of emergency
- A 12 months local authority rates waiver
- 0% loans for all impacted business and a Covid-19 compensation scheme
About Retail Excellence
Established in 1995, Retail Excellence is owned by the members, for the members. We are an organisation which invests in innovative and exciting learning, market intelligence, human resources services, Government representation and member networking initiatives. Retail Excellence has over 2,250 leading retail company members in Ireland. Our members are the most progressive and innovative retailers. Retail Excellence is by far the largest retail industry body in Ireland.
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