Damien English (Meath West, Fine Gael)
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Everyone is welcome. We will discuss the policy options to support business growth and job creation and retention in town and village centres. I welcome Mr. Stephen Lynam, director of Retail Ireland, Mr. Stephen Sealey, managing director of Brown Thomas, and Mr. Bob Parker, director of operations at Clerys. Ms Leesa Kavanagh, director of retail at Arnotts, is not present.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.
If we have not scared Mr. Lynam off, I will ask him to begin. He is familiar with the rules, having attended a meeting previously. We will spend a couple of months considering this matter, in consultation with witnesses, before recommending policy changes to the Minister that will benefit the retail sector. We hope that this process will feed into the Action Plan for Jobs in the autumn as regards the retail forums. This is the first meeting and the witnesses are the first presenters. We will probably discuss certain aspects with them again.

Mr. Stephen Lynam:

I thank the committee for the invitation. I offer apologies on behalf of Ms Kavanagh from Arnotts, as she got called away at the last minute.

Retail Ireland is the representative body for the entire retail sector. It numbers 3,000 shops, including department stores, DIY shops, electrical retailers, fashion and footwear retailers, supermarket groups, symbol groups and specialist retailers. We are a division of IBEC. Through that connection, we have close links with the Small Firms Association, which represents a number of small and independent retailers. Some of our members operate in out-of-town stores and town and city centres. Many operate in both.

These meetings are timely, as the recently established retail consultation forum, of which we are supportive, is due to discuss this matter. I hope that progress can be made between these hearings and that forum.

It will not be news to any of the members that retail has been at the sharp end of this recession. Sales are down by a quarter and 50,000 jobs have been lost. The number of vacant units has increased. However, we are a sector with significant potential. Our Strategy for Retail 2014-2016, copies of which I will leave, tells two important stories. First, we are the largest private sector employer in the country bar none, with a footprint in every town and village. Some 75% of retail businesses are located outside Dublin and a similar number are SMEs. Second, we have forecast that, if retail sales can in the first instance stabilise, as seems to be happening, and begin to grow by a modest 3% to 4% from 2016, we have the potential to create 40,000 new jobs by the end of the decade. Town centre rejuvenation is undoubtedly a part of that growth strategy.

The issue of the need to rejuvenate town centres has been at the centre of public debate for some years. The recession and the growing number of vacant outlets in or close to the centre of towns and cities has sharpened minds. A number of opinions have been expressed and industry representatives, politicians, economic operators and others have all made their views known.

Central to our approach is a recognition that out-of-town shopping is a reality in the Irish retail space. It brings with it benefits to retailers and consumers. Town centre rejuvenation does not, as some might suggest, have to come at the expense of the shopping centre or out-of-town retail experience. We believe in a truly national policy. It is vital that everyone concentrate not just on Dublin city centre but also on other major cities, including Cork, Limerick, Waterford and Galway. Further, smaller towns should not be neglected in the effort to breathe new life into the heart of city centres.

Policy formulation in this area falls into four broad themes from which individual policy recommendations may flow: measures focused on making city and town centres better places to visit; measures to make town centres more attractive to consumers; measures to tackle crime and improve safety; and measures to improve business conditions for retailers. If these four areas can be properly addressed in a timely fashion, major strides will be made. Mr. Sealey and Mr. Parker will discuss their experiences as practising retailers in a few minutes, but I will go through some of our policy suggestions.

Regarding measures focused on making city and town centres better places to visit, we have a number of proposals. As recommended in the British report "High Streets at the Heart of our Communities: The Government's response to the Mary Portas Review", the Irish Government should identify pilot towns and cities where new partnerships involving retailers, landlords, local authorities, representative groups and so on could be formed to establish targets and achieve demonstrable improvements in town centre locations. Building on the success of the Dublin business improvement district, BID, other towns and cities should establish, where demand among retailers and other businesses is present, their own BIDs to drive footfall. I advise the committee to hear from the Dublin BID as part of this process. That group can share its experience of Dublin city centre and describe how the BID system can be carried into other cities and towns.

Planning presents an issue. Specific measures should be taken in the planning process to make town and city centres attractive places to shop. By necessity, this may involve a change in the location of certain services, such as drug treatment clinics and homeless facilities. The importance of the provision of these services is not in doubt. Instead of being centrally located, however, they should be located closer to where those who are in receipt of them live. This will ensure a greater geographical spread of such services and allow for towns and cities to once again become vibrant centres of commerce.

When making town centres more attractive to consumers, there are a number of issues to consider. Public policy to date has focused on the need to encourage the use of public transport when travelling to city and town centres in order to reduce traffic congestion. While this is a worthy aim, it discourages consumers from travelling into city centres to make bulky and often more expensive purchases. It is obvious that a free-for-all parking system is not viable. However, consideration should be given to allowing those travelling into city and town centres for periods of two or three hours to park for free. Such a system could, for example, allow those who wish to park between the hours of 11 a.m. and 3 p.m. to park for free for two hours, thus giving city centre retailers their custom while avoiding any contribution to rush hour traffic congestion.

The Your Dublin, Your Voice survey, which was conducted some years ago by Dublin City Council, found that only 32% of respondents felt that the city was clean and tidy. Such a situation will not entice customers to come into a city or town centre. The Tidy Towns initiative has worked well for smaller towns and villages and has helped to instil local pride and respect for the surroundings in which people live and shop. Consideration should be given to how to instil such pride and respect in larger urban environments.

On measures to tackle crime and improve safety, the Your Dublin, Your Voicesurvey also found that fewer than one in three respondents felt safe in the city centre at night time. This must be improved on. To achieve greater safety at night, An Garda Síochána should prioritise gardaí on the beat during the hours of darkness and local authorities should ensure streets are properly illuminated.
Retail Ireland believes much of the policy consideration to reduce crime and anti-social behaviour in urban environments and the towns in which retailers operate has already been carried out and the policy now needs to be implemented. To this end, we recommend full implementation of the National Crime Council’s A Crime Prevention Strategy: Tackling the Concerns of Local Communities, which advocates, among other things, an integrated crime prevention strategy involving all relevant Departments, the development of community policing structures, a reduction in recidivism through work with ex-prisoners and greater investment in youth work at community level. We also fully supported the establishment of An Garda Síochána’s theft from shops prevention strategyand continue to play a role in its implementation.
Measures to improve business conditions for retailers are crucial. The report High Streets at the Heart of our Communities highlights the importance of local authority rates and their interconnectedness with the viability of retailers’ businesses. Mr. Sealey and Mr. Parker will expand further on this issue. Retail Ireland urges root and branch reform of local authority funding in order that less of the burden for this funding falls on retailers.
The huge difficulty of upward-only rent reviews, UORRs, for retailers is well documented and well known. Notwithstanding the constitutional difficulties encountered some years ago on this issue, action must be taken to address it now. Retail Ireland recently joined a number of other bodies in calling on the Government to allow Senator Feargal Quinn's Bill on this matter which has been passed by the Seanad to pass through the Dáil in order that the President can decide whether to refer it to the Supreme Court. We again take the opportunity to call on the Government to take that brave step. Where rents are high and footfall is low, it is crucial that other costs are also addressed. In Ireland the costs for retailers of labour, water, gas, electricity and professional services are far too high and must be addressed. If addressed, many town centre businesses will be saved and the opportunity for growth will present. Shopping is an integral part of the tourism experience in cities around the world. Retail Ireland believes Fáilte Ireland and other bodies charged with encouraging tourists to visit the country should concentrate more on this aspect of the tourist offering.
Deputies and Senators will be aware that there is a particular issue with vacant retail units throughout Ireland. Research from the CBRE shows that while retail activity has picked up a little in the past few months, vacancy rates in key towns and cities remain high. In quarter one in 2014 Athlone had a vacancy rate on its high street of 21.6%, an increase on 18.2% on the figure for quarter three last year. The vacancy rate on Patrick Street in Cork is up from 13% to 14.3%. Sligo's high street vacancy rate stands at 12.5%, unchanged from last year. The rate in Limerick also remains unchanged at 16.3%. On Henry Street in Dublin there is a vacancy rate of 12.8%, up from 4.3%. There are improvements in parts of the country, with high profile areas such as Grafton Street showing reduced vacancies and Cork's Opera Lane development fully let. However, the overall picture highlights the continued problems of the sector. A key problem is the high level of local authority charges such as commercial rates. It is vital to remember that a recovery in the retail sector will reduce vacancy rates, increase the rates base and ultimately provide extra funding for local authority services. A key way to make that happen is to reduce rates for retailers and offer rates holidays for retailers that take on a vacant unit. In that way we can breathe new life into towns and cities.
We need action on many fronts. We need to make town centres attractive, clean and safe places in which to do business and shop. We need to encourage retailers to take up vacant units. We need an appropriate retail tourism strategy and to address anti-social behaviour. With a joined-up approach, we can start a new chapter for towns and cities. The committee will now hear from retailers.

Mr. Stephen Sealey:

I am managing director of Brown Thomas which operates four department stores located in Dublin, Cork, Limerick and Galway and four BT2 stores, one located on the north side of the city, another on the south side of the city, one in Dundrum shopping centre and another in Blanchardstown shopping centre. As such, we have a fair method for taking the temperature in the retail sector in these locations.
I would like to speak about technology. It has made so many things easier for us. With our tablets and iPhones we now have access to the whole world of commerce. We can pay bills, move money around, book holidays and shop online. The point I am making is that technology has opened up alternative ways of doing things. It has opened up choice. We no longer need to go into town or the bank to shop or pay bills s we can now do this from the comfort of our sofas, on the bus, train, tram and so on. Most of the merchandise we sell in Brown Thomas can be purchased online from retailers in the United Kingdom, elsewhere in Europe or the United States. To state the obvious, customers who buy in our town and city stores are putting money back into the economy. Customers who buy online from overseas retailers are effectively siphoning money out of the economy.
My job is to make Brown Thomas a place where people want to shop, thereby sustaining the 2,000 jobs across our stores. The competition online is only going to get greater. Brown Thomas is increasing the amount of product it sells online. Our research shows that in five years 30% of what we sell through our stores will be sold online. To my mind, for towns and cities to survive, they must be an attractive choice for customers. Customers have choice and do not need to go into towns and cities. To my mind, to make our towns and cities attractive, they must, first, be safe - customers must feel relaxed and at ease - second, clean and free of odours, litter and graffiti; third, easily accessible, including by the customer's mode of choice, be it the car, bus, bicycle or on foot and, fourth, there must be easy and affordable parking. To my mind, our cities, particularly Dublin, do not satisfy these four essentials. Dublin city centre suffers from anti-social behaviour of all sorts. The Dublin Business Improvement District, BID, monitors finds of needles and other drug-taking paraphernalia, beggars and rough sleepers. I regret to say the city centre is a hot spot for this activity and we need to address it urgently. Clearly, it is a complex issue involving resource allocation and planning issues. However, unless these issues are addressed, the city centre will not be a destination of choice and will decline inexorably.
We need to address the issues within our control or that of the city councils. I read in today's edition of The Irish Times that Owen Keegan plans to introduce a new cycle land on the north side of the city. The article states: "...restricting the road space available to cars was essential as part of a sustainable transport system ... and it is not something that we have to apologise for". I have a couple of points to make. First, we know from our own research that customers who travel by car spend 30% more than those who travel by other means. It is not difficult to accept this because a person who wants to buy a heavy or valuable product will probably choose to travel by car. Second, delays or congestion will drive customers to other destinations. Shopping centres like the one in Dundrum provide a clean and safe environment, with easy access to parking. Data from our sales indicates that customers are voting with their feet. As I said, we operate in Dundrum and Blanchardstown shopping centres. Last year our store in Dundrum recorded a substantially higher growth rate than our store on Grafton Street. In fact, growth at the Dundrum store increased almost 12 times faster than at the store on Grafton Street. The rate of growth at the store in Blanchardstown was seven times faster than at the Grafton Street store. Data from our loyalty card system indicates that customers are choosing to shop where it is more convenient for them and that, increasingly, they are choosing to shop in the shopping centres.

I love cities and relish their variety. I love the one off little shops, the bars, cafés, galleries and restaurants for a quick bite to eat or a special occasion. I believe that if we can satisfy my four essentials, we will have a sound base on which to build business in our towns and cities. We must stay focused on making them places where people want to be, places that are safe and convenient.

I know I am on my own in making the following point. I am not asking for lower rates for Brown Thomas. I would like to receive better service for the rates I pay, but I am not asking for a reduction. However, I am asking for a reduction for small shops, the little one off traders who play a vital part in adding interest to the city centre. I do not ask for Brown Thomas because I know services have to be paid for. If I felt I got value for money and had a clean, safe and attractive city centre, I would be happy to pay rates because I would see the money go straight back on the bottom line.

Damien English (Meath West, Fine Gael)
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I thank Mr. Sealey. Mr. Parker will add a few words.

Mr. Bob Parker:

I thank the joint committee for giving me the opportunity to come before it. For fear of repeating what members have already heard, Mr. Sealey and I, more often than not, are in great competition on a weekly basis for a share of the consumer spend, but we agree on many things. Without repeating verbatim what he eloquently said, the sector is about giving consumers choice, having a blend of retailers available for them from which to choose and giving them a reason to get out of their armchairs and stop doing what they normally do, that is, shopping on the Internet or ordering over the telephone and travel into city and town centres. In order to get them to travel there must be a reason. City and town centres must be clean, safe and provide a choice and the right blend of services, be it retail stores or restaurants. As store director in the iconic Clerys, we are at the very front in seeing where that happens, but, more importantly, where it does not. My plea is for a complementary approach to regenerating town and city centres. We compete with each other day in, day out and may the best man win. However, we need a complementary approach to everything ranging from ease of usage, cost of parking, choice of retailers to the environment. Let us look at O'Connell Street, for example. It has a very cold environment and I do not see a café culture or a reason to dwell in the area. I do not see a reason for tourists to leave their hotels and stop on the street to take stock of its beautiful architecture, history and culture and then decide who will get their tourism euro. We seek a level playing field, a complementary approach and a safe environment.

I must give credit where credit is due. There have been a number of policing initiatives such as Operation Stilts and Operation Spire. My colleagues in the store and I have felt much safer in the environment because the initiatives deal with anti-social behaviour and substance abuse, etc. However, I fear that the measures have displaced the individuals concerned and that Mr. Sealey can now feel some of the impact on the southside. However, credit where credit is due, the operations have made O'Connell Street a safer place to visit and in which to trade. However, there is still a perception that the O'Connell Street area is a very unsafe place to visit. Statistics from the surveys conducted by Your Dublin, Your Voice indicate that one in every three people do not find the area to be a safe place in whcih to shop during daylight hours, while two out of every three do not feel safe in the area at dusk and night time. Even as late as last Saturday night we had a very serious incident under the clock at Clerys in which two tourists were assaulted and needed to be hospitalised.

I thank the committee for its time. I hope I have reinforced the points I needed to make. Mr. Sealey is not on his own in his comments on rates. Clerys does not seek a rate reduction either, but it does want value for money.

Dara Calleary (Mayo, Fianna Fail)
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I thank the delegation for attending and giving us its insights. There is not a lot with which we can disagree in the presentations.

I wish to make a point on Mr. Lynam's reference to a 25% decline in the retail sector because it mirrors a substantial decline in spending power. During the past six years people's incomes have been sliced and there is debt to be serviced. Where does Ireland fit in in terms of the decline internationally? Is the rate of decline in Ireland much higher than in countries of a similar size?

I am glad that Mr. Sealey dealt with the issue of online shopping because it strikes me as the biggest challenge facing retailers. He has made the point that money spent in that way is lost to the country in terms of VAT paid and sales. Therefore, we must look at the issue of taxing online purchases. Will the delegations suggest a strategy in this regard?

Reference was made to the differences between Dundrum shopping centre and Grafton Street. Has either delegation drilled down into research? Are there focus groups? Have people said why they prefer to visit Dundrum in bigger numbers than Grafton Street? Is there an age difference? Is the age profile of customers on Grafton Street higher than in Dundrum or Blanchardstown, for instance?

We all support Senator Feargal Quinn's Bill on upward only rent reviews, but we know what will happen to it, unless the new Minister has a change of heart and attitude. With respect to her, she is expected to make many changes, but I am not sure we will see this one being made. Has Retail Ireland has received any legal advise or assistance to guide us on this matter? There is legal advice available to the Government which states it can proceed.

My next questions are to Mr. Lynam. What is the position for retailers on servicing debt, including legacy debt? Does it affect their ability to grow their businesses and, in turn, town centres? Is it a serious problem in the retail sector?

I mean no offence to Mr. Lynam, but my final questions are to the two retailers, Mr. Sealey and Mr. Parker. Have people told them the direction in which the retail sector is moving? What will be offered to customers who enter through doors of their establishments in five and ten years time? How different will the service be from what is offered today? One can have all the nice streets and streetscapes imaginable - I endorse the comments made - but Mr. Parker is right that O'Connell Street is not very attractive. However, I disagree with some of the reasons he gave for this, but I do agree that there is something cold about the area. What will bring customers through the doors of these establishments? What will encourage them, as he said, to get off the couch?

Mr. Stephen Lynham:

On the 25% decline in retail sales, we are the worst in the European Union. I do not have the league table with me, but it might interest Deputies and Senators to know that even if we were to see a 3% to 4% increase in retail sales in the next two to three years - that is the most we are going to see - we would only reach the pre-crisis peak or see a rally in 2017. Therefore, one is looking at a lost decade, similar to the one experienced by retailers and every other business in Japan. I am perfectly aware that the same applies to many other businesses in Ireland.

Senator Feargal Quinn is present. I do not want to put words in his mouth about the Bill dealing with upward only rent reviews, but it is my understanding its provisions are transitional in nature and would fall within five years; therefore, it would not run contrary to the Constitution. The Government's legal advice was that action on the legislation would be unconstitutional, but there are conflicting views. The Bill, however, has been accepted by one House of the Oireachtas. Notwithstanding the advice the Government received in 2011, the fact that the Bill has been passed by the Seanad has advanced the debate on the issue. All we ask is that the Dáil be free to vote on it and that the President make up his mind on whether it should be referred to the Supreme Court. If he does not do so, I am sure - I am sure Senator Feargal Quinn agrees - it will be challenged by someone else and one way or the other we will find out. If it does not go our way, we will accept the decision and move on. We have a possible answer and it would be remiss of us not to try to avail of it.

Debt and servicing of legacy debt is another huge issue. The difficulty is that there is a dearth of data, but we are aware of many retail businesses that would be perfectly solvent and completely sustainable if only the debt issue could be temporarily parked and, as a corollary to this, if there was a line of credit to allow them businesses to invest and grow. I would like to able to say I could get more information on this, but there is not a great deal available. However, I will be in contact with the Deputy again.

Mr. Stephen Sealey:

Online strategy, for me, is to invest and play catch-up very fast. We started our online journey in October 2013. We put beauty products online, a large slice of our business, and they are doing reasonably well. We have added other categories such as shoes, sunglasses and accessories which are also showing good promise. Our initial investment was €1 million and I have decided to invest a further €1 million in accelerating our presence online. My ambition is that by October this year half of the products we sell in the store will be available online. We are fighting the offshore Internet retailers, but I am confident that we can succeed because we can offer a better delivery proposition than they can. If one orders online from the United Kingdom, delivery typically takes three or four days. By this autumn we will be able to offer same day delivery for a premium charge or a next day delivery charge. We are fighting and must own that space. Coming to it late was not bad because we have the latest technology. It is fully responsive and works on the telephone and every device and, of course, we can learn from where other people have failed.

With regard to Dundrum and Blanchardstown shopping centres, what I would call our lower middle market sales are going there. The top of our business, the designer business, is only available in Dublin, although we would be happy to ship pieces to Dundrum. The middle market is a very successful and growing part of our business and the demographic is typically the 30 to 40 year old, people who have a young family and are choosing to shop in the shopping centres. It is an easier and more convenient experience for them.

The Deputy asked about our strategy. It is to make our store an absolute destination. I should be charging a consultancy fee for this, particularly as my colleagues are present. As a first step, we are in the middle of a spend of €8.5 million on the ground floor of the store to refurbish it and open new boutiques for luxury brands. Many of these brands are only available in Ireland through Brown Thomas; therefore, one need not travel to London or Paris but come to Brown Thomas and buy them from us. We must then think of what we must do into the future. Our view is that we should invest more in services, things one cannot get online. We have a big beauty business and one can do a great deal in developing it further in terms of services, spa treatments and so forth. The other thing we can offer is innovation. Not a day goes by when we do not have a buyer on an aeroplane going somewhere to look at something new. It might not just be a new brand of clothes; it could be anything. We must look to the future. We start stocking various technology items before Christmas which are not products we normally trade. We must add excitement in a never ending quest for newness.

To sum it up, it involves investment, making sure we are a destination, looking to services and experiences that cannot be replicated online and relentless innovation and newness all the time.

Mr. Bob Parker:

There is not much to say by way of differential. As experienced retailers, we are very much aware of what is happening in the marketplace. Clerys is a little late to the market in terms of online transactional websites. We have just completed a feasibility study and are now looking at funding to get us off the mark in that regard. In our strategy we clearly believe there is a place for clicks and bricks. There is ease of purchase online, but there is still a tactile requirement when one is purchasing certain products. One cannot beat good, old-fashioned service, friendliness and a nice environment. We have recently refurbished the store and our environment is very fresh and welcoming. We receive many positive comments about it, but it is about one's people. It is about investing in one's people, their service and product knowledge - the things one cannot get online or about which one is not sure. It is about making sure there is a reason to come into the store and wish to purchase. When people are in the store, it is about the blend and range of services of which they can avail, be it a restaurant, coffee shop, pit stop or a service such as a foot or a beauty treatment. It is about maximising and giving people a reason to stay in the store, feel good about the service and the treatment they receive when they are in and treating customers as if they are one's friends. One cannot do this online. One can have ease, convenience and perhaps price but one cannot beat good, old, honest to goodness service.

The age profile in our business is historically ageing. Our strategy is to attract the mum, the mum-to-be, the daughter and the grandmother and to have a story for life in wishing to visit Clerys. That is the strategy we are pursuing.

Peadar Tóibín (Meath West, Sinn Fein)
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Ba mhaith liom buíochas a ghabháil le Mr. Lynam, Mr. Sealey agus Mr. Parker as a gcur i láthair.

The Government has a big role to play in this issue. The under-funding of local authorities has pushed local authorities to obtain their funding from two areas, business rates and car parking charges. These often kill the goose that lays the egg in the first place. It is important that the Government play its role in this regard. We believe in the necessity to have a progressive rate, which might fit in with what Mr. Sealey said. While the rate should reflect the size and type of business, it should also reflect the profitability of the business. It should not be so high that it makes a successful business uncompetitive but allows for businesses that are struggling, especially at present, to fight another day. Also, the flat taxes introduced in recent times have had an effect on retailers. Property charges made a dent in people's disposable income and I have heard much anecdotal evidence that the current talk about water charges is lowering expectations of disposable income into the future. They are, therefore, making allowances for them now also.

I realise Retail Ireland represents both out-of-town and town centre businesses. If we want to get people back into the town centre, a carrot and stick approach is required. It must be incentivised which is sometimes a zero sum experience. It is hard to please all representative groups. Are the car parking spaces in out-of-town centres subject to rates? Obviously, a major competitive advantage for Dundrum shopping centre as opposed to businesses on Grafton Street would be the availability of car parking spaces. We brought forward a Bill on upward only rent reviews, but the Government did not accept it. I believe Mr. Lynam is correct in saying it is important it be tested constitutionally.

Local authorities have a massive role to play. In the North local authorities will provide merchandising and market training for businesses; they will provide mystery shoppers and do their utmost to ensure town centre retailers are fully tied up. Approximately €3 billion is spent on online sales, of which two thirds leaves the island. That figure will only increase in the future. Local authorities and especially the local enterprise offices, LEOs, have a massive role to play in training retailers in town centres in how to provide for online marketing at least, if not a step up to online retailing also.

Providing a cycle path on the north side of the city is a matter of life and death. People will die in the next couple of years if a cycle path is not provided. Buses continuously cut off cyclists.

While there might be a reduction in the net spend per individual, the challenge is to make sure the cycling leads to a reduction in congestion. That will lead to more people being in the town centres, which will offset that reduction in the net spend per individual.

I commend the analysis done by Retail Ireland of the number of vacancies in main streets because the "shutter island" experience is real, particularly in areas outside the M50. Some of the figures Mr. Lynam gave us show a dramatic increase from 2013 to 2014.

Mr. Lynam mentioned rates holidays. Many incumbent retailers have problems with rates holidays because they believe a competitive advantage is being given to a "newbie" in the particular market, which takes money from one and gives to the other. It is similar to the Government's attitude with regard to grants - one does not displace business that already exists. I ask that we would try to square that circle.

Mr. Stephen Lynam:

On the taxation point, whatever one's view on property charges, water charges and so on, from a business point of view the shame is that there has been a rebalance in terms of the way local authorities are funded yet businesses, be they retail or otherwise, have not seen a reduction on the other side. Retailers who are completely dependent on consumer spend are being continuously squeezed in terms of their own costs while their consumer base has less money. Where we go from there I do not know, other than to say that a chicken and egg situation may arise whereby if we freeze rates, and we will be advocating cuts in personal taxation in the next budget, that will in and of itself spur economic activity and hopefully lead to changes.

On Internet sales, the data we have is much worse. We understand that in 2012, the online market was worth €4 billion and in 2016 will have quadrupled to €16 billion but - and this is where the negativity comes in - 75% of that €4 billion went to stores with a physical presence in this country. People spending online is not in and of itself a problem for this country. The problem is that so little of that online spend goes to Irish retailers, and by Irish retailers I mean retailers who employ people here. The trick is to ensure that more of that online spend goes to retailers based in towns and cities around Ireland. I will let the gentlemen take the other questions.

Mr. Bob Parker:

With regard to the rates holiday question, by all means we need to square the circle but if rates holidays lead to a better blend, better occupation and a more complete offering in our towns and city centres, as a retailer I would welcome that. We welcome competition. It keeps us on our toes. It keeps us hungry. It keeps us looking for innovation. It keeps us having to continuously improve upon our service levels and makes us sit back and think, and not get complacent. I would be in favour of that provided it was part of a coherent strategy with a finite end point, if that makes sense. In terms of a planned, co-ordinated approach to it, I would welcome full occupancy with the right blend that complements the offering - to go back to the complementary statement - and gives the consumer the choice. Again, may the best man win in a competitive environment.

Mr. Stephen Sealey:

I entirely agree with that. I spoke about trying to make our stores a destination. We make a city centre or a town centre a destination through the mix of retailers in it. One of the attractive aspects in certain quarters of Dublin is the mix of small shops selling goods one cannot find on the Internet, and it is a good reason to come into the city. Likewise, I would be supportive of that.

Damien English (Meath West, Fine Gael)
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I will group some questions now. I call Deputy John Lyons followed by Senator Feargal Quinn and Senator Mary White.

John Lyons (Dublin North West, Labour)
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Some of the questions I had intended to ask were answered in the earlier conversation. I was in New York some time ago where Columbus Circle has the Time Warner shopping centre, which they describe as a shopping experience. Clearly, both Brown Thomas and Clerys are trying to create all those flavour enhancers for customers who go into their department stores but we must face up to the reality that whether we like it or not, many of us are buying goods online, and more of us will buy them online. We cannot buy our meal in a restaurant online but we buy other goods. That is a tough square to circle. We cannot get away from that but it is a question of how far behind we are, as retailers. I refer not just to the witnesses, but the smaller retailers. We have representatives from two major department stores before us but I am concerned, as I am sure are other members, about our local towns, which became grey during the recession. The retailers in those towns are fighting just to have some sustainability, and some have been better than others at coming up with solutions.

I am conscious that Mr. Sealey represents members from out of town centres also and it would be particularly important for him to answer my next question on which there are different points of view. Deputy Tóibín might have touched on it earlier. It concerns the variation in rates, an issue I have raised in recent years. Our planning guidelines state that towns and villages are at the heart of our retail sector yet we have allowed out of town retail units to be built to beat the band, which has been detrimental to our local towns and villages. Is it not the case that if we want to enforce planning guidelines, the rates should reflect the guidelines? If we want to keep the heart of retail in our towns, villages and big cities, that must be reflected in the way we charge rates. I refer to the competitive advantage a retailer has in Dundrum shopping centre or a large Tesco store which has other ancillary services and multiple car parking spaces. I believe they pay for those spaces through development levies, which answer was given earlier. They do not have them for free, so to speak. I believe they pay for them somewhere along the line. If we want to reinforce our guidelines and make our towns and city centres the heart of retail, should we not have a variation in rates to reflect that? I accept it is complicated but should we not have what has been done in the North? Essentially, it would be something like a Tesco tax, to use that name. That is the major question to which I would like an answer.

Feargal Quinn (Independent)
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It has been very interesting to listen to the gentlemen. I have been in business for a long time and many of the issues we concern ourselves about now are not unlike those we were concerned about 50 years ago. We complained about newcomers coming in. When I first started there was Lipton's Home and Colonial, Leverett & Frye and a half dozen others in Ireland yet there were Irish companies that succeeded, and such companies did not always succeed.

I believe the resolution to this problem will not come from on high or from the Government doing anything in particular. It will be individuals doing exactly what Mr. Parker spoke about, namely, concentrating on the personality, or what Mr. Sealey mentioned. I am very disappointed in Brown Thomas because I went into the store the other day and my wife fell head over heels for it. It will cost me a great deal of money if Mr. Sealey continues doing what he is doing. It seems to me that the results will be exactly what the two representatives spoke about.

I travelled around the country a good deal recently with a television show and one sees individual shops doing very well in towns that are not doing very well. The answer will depend on the individuals but what they can do in the towns is get together with their competitors. Some towns are dying a death. One can see the number of empty shops but one can also see that the town has not got together to do something to attract more business.

I was in Glasthule recently. Glasthule is a small area but it did not have one empty shop. There were no big international shops. They were all individual traders but as we left Glasthule and drove into Dún Laoghaire, we saw empty shop after empty shop.

It seems the people in Glasthule did something like the people in Malahide and Howth - the places I know - because they seem to have been able to work together and make something of their location so people would shop there. The solution will rest in the hands of the individual retailers to a very large extent but that does not mean Retail Ireland cannot do a great deal. I am appreciative of the supports of Retail Ireland and the 12 associations that have got together to say the upward-only rent issue can be solved.

I am convinced that the huge problem Mr. Stephen Lynam mentioned regarding upward-only rent reviews can be solved. Even if the Government is doubtful about whether the legislation will work, the answer is to get it through the Dáil. The President will say he will not sign it until he gets the answer from the Supreme Court. The Supreme Court will say either "Yes" or "No” and then we will know where we stand. The answer involves doing something like that.

Many more people will be shopping online in the future. A couple of years ago in Estonia I went into a comparatively small shop with two or three employees on the floor. I was taken upstairs by the boss where there were 11 people working on Internet sales. I suppose they were selling to everywhere but certainly to eastern Europe. I mention this because the owner of the small shop discovered he would not do sufficient business over the counter in his shop and that he could do something about it. The matter is in our own hands. It is in our hands to do a great job at exporting. If we are complaining that Irish consumers are importing from abroad without having to pay the taxes they might otherwise have to pay, we must realise it is an advantage for us in that we can do exactly the same thing by selling abroad. That is what we have got to do.

There are some very interesting smaller companies that are succeeding very well. I am thinking mainly of Dublin, which has Donnybrook Fair, Fallon and Byrne, Morton's and Avoca. These retailers are thriving, succeeding and doing very well. Therefore, let us not talk ourselves into saying all would be well if the Government or local authority did something; let us make sure we do it ourselves. That is the main message we can get out.

Mary White (Fianna Fail)
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I welcome the delegates. Yesterday I was involved in the peace process in Belfast. I returned from Belfast using the airport bus, whose final stop was at the Gresham Hotel. I had a very pleasant journey on the beautiful bus and there was beautiful countryside all the way down. It was very therapeutic but I will never forget the shock I got when I got to O'Connell Street. To me, shopping has to be about a good experience but O'Connell Street is filthy. We are all familiar with the various reports. The three delegates have a huge problem on their hands. I will never forget what I saw and I am not exaggerating. I felt like ringing up Joe Duffy but I said to myself I should mind my own business as I have enough to do. A fortune has been paid on the redesign of O'Connell Street and there are beautiful buildings that afford an historical experience but I do not know what the delegates are going to do about the problem I describe. I went into Clerys. While the litter on the street is disgusting, the pavements are filthy. They need to be washed down regularly. Disregarding the Luas works — it is tremendous that we are to have that connection — the pavement at the bottom of Grafton Street was filthy. I just could not believe my eyes. I believed the condition would improve farther on but it was actually dirty outside Allied Irish Banks. I am ashamed because when I was in Belfast there was a beautiful pristine atmosphere. I am not blaming the three delegates. They spoke about value for money in rates, etc, and consequently I hope to God they will be able to address the problem.

I was in Dundrum Town Centre this morning at the ATM. There is constant cleaning taking place there. Cleaning must be constant, not once off. I met a man on O'Connell Street who had a tiny little cleaning gadget but in Dundrum under Mr. Nugent there is constant cleaning. One never enters the shopping centre without seeing somebody cleaning. With all the talk about online competition and the various reports, I really feel the delegates have a crisis on their hands. I do not want to go back down the street again. I cannot talk about drugs — I have no experience of that — but I can state the street is dirty. What the hell have the delegates got to say about it? I am not blaming them. If they want people to shop on our main street, O'Connell Street, how will they make it a pleasant experience? People will not go there as it is. In Dundrum, Mr. Nugent is particular about what he wants. After the hassle of this place, I go to Dundrum Town Centre just to relax. It is so beautiful and clean that it makes you feel good. It is a beautiful environment and it is kept clean all the time. O'Connell Street is dirty and littered and the pavements have ingrained dirt. I am upset about it, to be honest.

Seán Kyne (Galway West, Fine Gael)
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Many of the points have been covered so I will not repeat them. I welcome the group. There has been much talk about O'Connell Street. I do not believe O'Connell Street has been the same since they cut down the nice trees, but that is just a personal view. I used to come from the west and see the nice trees. Anyway, somebody made the decision.

Online trade was mentioned. Coming from Galway, it would be remiss of me not to mention Kenny's Bookshop in Galway, which was the second bookshop in the world, after Amazon, to have an online presence. This occurred in the mid to late 1990s. Irish retailers just missed the boat in terms of online sales. Either they did not see this coming or, if they did, did not do enough about it, notwithstanding what the delegates said about it.

The discussion is very Dublin orientated. There is a big world outside Dublin. Some 50% of the Irish population live in the Leinster area, and they have different issues. As a committee, we have visited places in the west, including Castlebar, Ballinrobe and Ballinasloe, to learn about the issues those substantial towns are facing, including the issues of parking charges and out-of-town multiples. Not many in the west would be concerned about the struggle of Arnotts, Brown Thomas or Clerys in that they regard themselves as struggling because of reducing populations and emigration. This discussion is very Dublin-centric.

People make choices, including retail choices. I was watching a documentary on Sky about the big freeze in the United Kingdom in 2009 and 2010. We had it here also. During that period, there was a huge spike in online shopping, for the obvious reason that people could not get out of their homes. There is still a desire for people to go out and feel and touch the products. If people go into a shop to buy one product, they end up buying a number of products. The better the retail experience, the more likely it is that customers will return. Do the delegates believe that if people have particular tastes, there is not a lot that the Government can do to change them? Although the councils can make places look nice, after that it is a question of the retail experience the customer can have. At home one often hears people say they do not want to go into Galway because they will not get parking at a particular time of the day or on a Friday evening, for example. It is understandable that people will opt for what is convenient.

Anthony Lawlor (Kildare North, Fine Gael)
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I welcome the delegates. As with Deputy Kyne, I believe this discussion is very Dublin city centre orientated.

I remember getting my rear end kicked when I was very much in support of an outlet shop in Goffs in Kill. Local traders could see the damage that was going to be done to them on a long-term basis as a consequence of traders coming from Grafton Street. I am talking about rural towns, including my town, Naas, and also Celbridge, Maynooth and Leixlip, all of which are on the periphery of Dublin. I include also the Chairman's town, Navan. These are all close to attractive shopping centres along the M50.

Senator Quinn referred to making towns a better place to visit. I heard what the witnesses said in this regard. I like the idea of town teams whereby a town works as a team to generate its own identity and purpose. Down through the years, Naas has become a good environment for high-end ladies' fashion retailers. We should be building on this. Perhaps we could develop this approach in other towns.

I disagree with the sentiments on parking. There has to be some parking charge or people will park all day. A charge is a necessary evil to ensure parking spaces continue to become available. I have a problem with clamping, which mostly occurs in private car parks. A Bill to come before the Dáil will be very strong on not allowing clamping in private car parks. They should use barriers because people can get detained elsewhere. Ladies, in particular, can get caught in nice fashion boutiques for a little longer than expected. Men are more likely to be caught in a pub than a men’s shop.

Damien English (Meath West, Fine Gael)
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The Deputy will get me in trouble.

Anthony Lawlor (Kildare North, Fine Gael)
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My Y chromosome comes through every now and again.

The witnesses should be embracing the online phenomenon more strongly. Some days ago I called into a little boutique in Naas that has been established for about a year and a half. I asked the proprietor how she was doing and she said she was flying. She told me she has a good clientele who must come to her shop to pick up what they buy online. I realised any town could do this. Instead of posting out goods, one could require the customer to come to collect them. One could link in with other shops. If in Naas one cannot get a suitable pair of shoes in one shop, the shopkeeper will tell one there is nice boutique elsewhere in the town with nicer shoes. The retailers work as a town team, as was mentioned.

I do not give up hope. We must reinvent ourselves and put forward new ideas to attract people. There are so many other attractions nowadays, including lazy options on the television. The retail industry is undergoing a complete change and it must embrace this rather than fight it. The changes present a real option for small retailers.

With regard to rates, the centres of small towns should be given some sort of rates relief or compensation to reinvigorate them. This would compensate for the loss of business caused by the out-of-town units with big car-parking facilities.

The issue of upward-only rent reviews in small towns is not relevant. It is only relevant in big towns because most premises in small towns are privately owned or owned by an individual for whom it is more important to have a tenant rather than none as a consequence of increasing the rent. The point is not really relevant in certain smaller towns.

Perhaps the delegates will revert to me on the question of smaller towns. They were talking about the centres of cities.

Damien English (Meath West, Fine Gael)
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To clarify, the whole country will be covered in this discussion on retail, and not just Dublin, whose main streets are Grafton Street and O'Connell Street. We are examining the retail sector in all towns and villages.

Anthony Lawlor (Kildare North, Fine Gael)
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The representative body is being specific about the centre of Dublin. I hope the delegation will return to talk about smaller towns.

Damien English (Meath West, Fine Gael)
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In fairness, many towns are covered in the presentation. Two owners of businesses in the centre of Dublin are present but-----

Mr. Stephen Lynam:

To be clear, Mr. Sealey’s business operates throughout the country.

Mr. Stephen Sealey:

We operate in Galway.

Áine Collins (Cork North West, Fine Gael)
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The delegates are all very welcome. As a consumer and frequenter of all the delegates' shops, I can say they are all fabulous. I speak as a consumer, a mother and someone who works full-time. Increasingly, customers are purchasing online. I live in rural Ireland and the thought of going shopping on a Saturday is not one that invigorates me because of the time it takes. I want to do other things. I suppose the world is changing and we have the choice. I am glad to hear both delegates' businesses are going online.

I compliment Retail Ireland because it has been going around the country engaging with towns that choose to engage with it. In order to educate retailers, it has been giving courses along with Cork County Council, which I can talk about because I live in Cork. There is a week-to-week programme to get retailers to go online. The State introduced a grant of €7,500 to encourage people to go online. A lot has been done.

There has been much talk about rates. I do not believe rates comprise a major issue in regard to retail. It is an issue we raise quite a lot, but the good news is that there will be a Bill before the House before the end of the year to transfer responsibility for deciding on rates from the commissioner to the local authorities. As one knows, for years responsibility rested with the town councils in various areas. This platform is to change in the near future. We have a challenge but it is one that we should embrace because there will be options for everybody. It should not be all about what the Government does. More work must be done through people coming together to reinvigorate the industry. There is a great opportunity for Irish stores to sell abroad, as Senator Quinn stated. I am sure Brown Thomas and Clerys will be able to fit into that space when the organisation is up and running full-time.

Damien English (Meath West, Fine Gael)
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We have approximately five minutes left in which we will hear some brief comments and answers to most of the questions. The delegation may answer in writing also. Why are so many Irish retailers late in engaging in online retailing, or why are they nearly afraid of it? It is not always about cost. Perhaps the delegates will touch on the reasons. We want to include this in our report. If we can do anything to help, we will.

Mr. Stephen Lynam:

I will be very brief because I suspect the members want to hear from the retailers more than me. There were many questions but the common theme was online retailing. Those who said we should regard online retailing not as a threat but as an opportunity are correct. There are barriers specific to the market that stop small, medium and large Irish operators from going online. In our strategy for retail, we have committed to a body of work to assist Irish retailers in going online. Annually, we survey members on their existing online presence and plans to develop it. Last year, we identified that two thirds of Irish retailers intended either to establish or improve an existing online presence. We have identified specific barriers to online trading. For example, the cost of postage and delivery is one. There is anecdotal evidence that it is cheaper to send a product to Newry and have it re-sent through the Royal Mail than it is to use our postal service. That will not encourage any Irish retailer to go online, particularly where there are different economies of scale. However, I accept Senator Quinn's point that every Irish retailer is now a potential exporter with a much bigger market, the world market.

We are working with the Department of Jobs, Enterprise and Innovation through the retail consultation forum, which we lobbied intensively to establish, to come up with proposals. Retail Ireland and IBEC operate the biggest skill net for retailers in the country. A specific body of work in this regard is to assist small and medium retailers in getting online, obtaining the expertise to maintain an online presence and building on it. Getting online is not just about creating a website and leaving it there; it is like having a whole new store. It is that intricate and intensive. It does not happen overnight, particularly for small businesses and the businesses mentioned by members.

I said at the start that we need a national approach, not just one for Dublin. That is certainly the case. What will work to rejuvenate Dublin city centre will not work to rejuvenate Castlebar, Portlaoise and Navan. Therefore, we need a nuanced and specific set of proposals, depending on the particular problems in particular towns.

Mr. Bob Parker:

For me, retail is about experience, be it the purchasing environment, efficiency, price, the speed with which an order is processed or, when in a store, what one touches, what one feels and how one is served. Retailers, particularly me, do not regard online retailing as a threat but as a great opportunity to add to the armoury of experience one gives the consumer. Retailers, in general, favour change.

Mr. Stephen Sealey spoke very eloquently about seeking new innovation, whether that be a product or a service. That experience must be complementary.

The Senator spoke about how filthy O'Connell Street is. It is part of an experience. When one steps off a coach or out of a hotel as a tourist or visitor, it is the first thing one sees. We are already on the back foot. The experience starts when tourists get to the city, and it includes how they get to it. It includes their experience on the bus, Luas or train right through the external environment to the internal environment in the retailer's store. Retailers can control the internal environments in our stores, which are constantly changing as we seek to provide better experiences. We rain check, sense check and conduct exit surveys on what we are doing. However, we need help, support and joined-up complementary thinking about the external environment, whether it be the blend of retailers, the environment, hardscape or softscape required to create the experience in Dublin or my home town of Nenagh. Once one is a retailer, one does not shop in other towns with a different head on. One shops as a retailer and looks at the experiences and difficulties people are having. In many ways, they are a microcosm of what we experience. It is about a joined-up approach under which we all work hard to get the right result.

Mr. Stephen Sealey:

I clarify that I am not coming here asking the Government to do a load of stuff. I am asking the Government to create a framework in which local authorities can deliver to us a clean and well-maintained environment and in which sufficient resources are applied to policing to provide a safe environment. After that, we will get on and do it.

I see the Internet as a tremendous opportunity. Perhaps we came to it late, but that was because of cost and complexity. To have 90,000 items photographed, videoed and placed online is a significant undertaking. I will have committed €4 million to it. It is a cost but I felt the time was now right. We have embraced it wholeheartedly and will deliver a world-class online experience which we export across the world.

Senator Mary White said it all about the filth. We pay €25,000 a year on top of our rates to have the street outside our store power-hosed three times a week. They power-hose all three sides of the store on the street to 2.5 m from the front. That is what we have to do. Even then, one must question the material chosen, which was Senator White's exact point. Even after power-hosing, it is grubby and dirty. However, we get on and do it.

Everyone has talked about the retail experience. There is a great deal of innovation in Ireland. I have not spoken about the mentoring we do with Irish designers. Every year, we hold a promotion called "Create" in respect of which we meet with Irish designers, offer them advice on manufacture and fit and showcase them in the store. It is one of a number of unique initiatives we do and it is all about bringing the personality back into retail. I am confident that given the minimal support of a clean, safe place to do business, we can get on and do the rest.

Damien English (Meath West, Fine Gael)
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I thank the witnesses for their presentations and answers. It was a good start to our work in the area.
We move now to our second discussion under the topic, which is with Mr. David Fitzsimons, chief executive of Retail Excellence Ireland, Mr. Martin Blackwell, CEO of the Association of Town Centre Management UK, who has come over especially for today's meeting, which we appreciate, and Mr. Cormac Kennedy, chairman of Retail Excellence Ireland's town and city revival committee and head of property in Easons. They are here to discuss policy options to support business growth and job creation and retention in towns and villages. The witnesses will have heard the end of the first set of presentations and will have the gist of what is happening. The joint committee's plan is to meet and engage over the next couple of months with a great many stakeholders in the area to formulate a report which feeds into initiatives under the Action Plan for Jobs. Decisions will be made on the report, so we hope it will be a useful one which leads to action.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable.
I ask Mr. David Fitzsimons to make his presentation, which we will follow with questions and answers.

Mr. David Fitzsimons:

I thank the joint committee for its time today. Retail Excellence Ireland is Ireland's largest retail industry group, with more than 1,000 member companies operating 11,000 stores across the country in our villages, towns and cities.

To kick off, I would appreciate it if we could go back a couple of years. In 2012, we felt towns were under tremendous pressure. Even in the adversarial setting of upward-only rents, those giving out the most were smaller retailers in smaller towns and villages. The reason was the retail mix. The offer that was the town centre was depleted, diminished and, in some cases, derelict. Mr. Cormac Kennedy came to chair a committee and we carried out the largest ever assessment of what citizens wanted from their towns. We were delighted that the Independent News and Media group contributed €400,000 in advertising, and we undertook a significant national campaign. We interviewed 17,000 citizens and found that there were a number of key drivers in bringing people to town centres.

The first was proximity. Obviously, if a person lives closer to a town, they are more likely to visit it. The second was the retail mix. Car parking was sixth. The point that came across very clearly to us is that one can pay people to go to certain towns and cities and if the retail mix was not right, they would not come. There was too much discussion about car parking charges whereas the fundamental point was that the retail and hospitality mix had depleted and was not engaging people and thus they were getting in their cars and going up the road to Kildare Village or Dundrum or wherever.

In 2013, we designed a framework for managing the town which we published through Chambers Ireland and lots of business associations and groups to advise people on how one manages a town. The best thing we did during that year was establish a national town management executive chaired by Mr. Kennedy. It involves the County and City Managers' Association, Fáilte Ireland, Chambers Ireland, An Garda Síochána and NAMA. We came together and said that we would work together as a national group to assist smaller towns and cities around the country.

In that regard, we opened an invitation to become a pilot town to work with us over the coming 12 months. Limerick and Carlow won that competition. We were overawed by the number of applications. Today we continue to work with Limerick and Carlow. We are doing three things in both locations that will work anywhere. The first is getting the infrastructure right so we have established town teams. This includes every single stakeholder, not just local government and chambers of commerce, but voluntary groups, tidy towns groups and educationalists - young and old. We have put together a plan with three simple pillars.

The first is retail and hospitality investment which is filling the boxes and looking at innovative use for those boxes. In some cases, we broke the law and convinced the local authority to offer some kind of rates incentive, which they now do in the form of a grant - obviously, they are not allowed to provide for any rates discount or waiver - and that has worked. The second thing is citizen engagement. What we did was remind citizens that it is their public realm. In those locations, they put together events, occasions and promotions to bring people back into their towns. Next week is Dine Out in Limerick, the following week is Fashion Week and the following week is Outdoor Cinema Night. It aims to reacquaint people with their civic space. The third thing we did was implement street auditing - street standards and safety. Retailers and all the stakeholders come together, sign a statute of behaviour and say they will keep a town or city clean and get behind all these promotions and that together they will succeed.

That brings us up to today. In recent weeks, we have proposed to the Department of the Environment, Community and Local Government the establishment of a town centre management academy. I am not being adversarial but we feel that local authorities, which have been very giving and supportive through the County and City Managers Association initiatives, need to be retrained away from sewerage, roads and infrastructure towards Don Nugent's approach - what Dundrum does in this scenario. It is pleasing that we have agreed a strategic relationship with the Association of Town and City Management, ATCM, in the UK which has been doing these things for 21 years. With that, I will hand over to my colleague, Martin Blackwell, to explain.

Damien English (Meath West, Fine Gael)
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I thank Mr. Fitzsimons for that very positive news.

Mr. Martin Blackwell:

I am delighted to be here. As Mr. Fitzsimons said, we have been doing this for over 20 years. About 25 years ago, four people came together who had the job title of town centre manager. They met in a pub and decided they ought to talk to each other more often. That became this association that now represents 600 places around the UK and a handful in Ireland. Over those years, we have learned an awful lot about what does and does not work. The key things about any change one wants to make is that it must be done in a genuine partnership. That is a word that is often over-used and misunderstood. It has been really instrumental for us in doing some work over the past couple of years. Town teams was a phrase invented by a lady called Mary Portas who was invited by David Cameron to undertake a review of town centres. Mary Portas did that and we helped and supported her. In the past couple of years, the government has formed something called the Future High Streets Forum. I sit on that forum, which is chaired by a Minister for town centres. We have been carrying out work over the past couple of years with these new groups that have been established called town teams. The government ran a competition and we ran some workshops around England to help places put a good application together. We were all stunned when they got 400 applications from places that wanted to be pilots for some of the ideas in the Portas Review. Over the past two years, we have been commissioned by the government to work with these new town teams and establish them as new groups.

What has been really interesting is that the relationship between town centre management as we know it and town teams is pretty much the same. The same process applies. Town centre management is a process. It is about getting the right people around the table to work together - the key stakeholders. That must be the public sector - local government - the business community and the people. It is a matter of getting those people to come together and work together to establish a vision for what they want their place to be, a vision that will be different in different places. Dublin is very different to many other places. We have just awarded a purple flag, which is our evening and night time economy programme, to Killarney. Places like Bray and Ennis also have that status but they are very different. The evening economy in Killarney is really important to it, much more than in other places. Once one gets that vision to which everybody can sign up, one then develops a strategy to deliver that vision and finally an action plan. The action plan will be different in different places.

We have a number of programmes to support those action plans. One of them is around the evening and night time economy. A total of 50 places around the UK and Ireland now have purple flag status. When the Portas Review came out, I was asked to go and see the Minister at the time. He asked what I thought about the review and I said that we liked some bits, as one does, but were not quite so sure about others. I asked him whether he realised that the motor industry in the UK was worth £10 billion. He gave me a strange look and I said that the fashion industry was worth £20 billion and the telecommunications industry was worth £30 billion. If one adds it all up, it does not come to the value of the evening and night time economy, which is worth £60 billion, but Mary Portas did not mention it. While retail is really important, it is not the whole story. One needs to be able to trade 24-7. Earlier today, I was talking to Richard Guiney who is the manager of Dublin City BID. He thinks that up to 30% of the turnover in Dublin now takes place after dark. One ignores that at one's peril.

The Digital High Street is another one of our other programmes. Earlier witnesses spoke about the importance of online business. We are now delivering a programme to train SMEs and small retailers on how to take advantage of the digital economy. Research in the UK suggests that less than 2% of small retailers are using social media to connect with their customers. We have three basic programmes - three training days - on how to think about getting one's business online. The first one helps people ask the right questions. We hear stories of people spending £20,000 or £30,000 building a fantastic all-singing, all-dancing website that does not do any business because they did not need it. It is about making the right decisions about what is good for one's business in terms of digital.

Another one of our programmes is about opening pop-up stores where young entrepreneurs who possibly have an online business and are doing well want to open premises. We are beginning to see things coming back the other way. Two or three years ago, the rhetoric was "the Internet's going to kill the high street." The rhetoric I now hear is "the smartphone's going to save the high street." I do not believe either is true but finding ways to work with all of that community and to bring everybody together to collectively decide how they want to take their place forward must be the way forward for us. We have got the experience and tools to enable people to do that for themselves. We certainly do not do it for them. We just help and support people and give them the tools and the opportunity to do it for themselves.

Damien English (Meath West, Fine Gael)
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I thank Mr. Blackwell for that. It was very interesting. Does Mr. Kennedy have anything to add?

Mr. Cormac Kennedy:

The way I see it, driving jobs in town centres is simple - more retailers and commercial premises will drive it. The way one must approach things in a town centre is no different from the way one would approach them in a shopping centre such as the one in Dundrum. A shopping centre would have a marketing manager and a facilities manager to run the premises, taking charge of the lettings, landscaping, security, cleaning and so forth. One particular person would lead the charge. Towns need to adopt the same practices and procedures. They need to assess their cleanliness regimes. They also need to analyse their tenant mix to determine if there are gaps and then target potential tenants to fill the gaps and make a difference. Hospitality is a key area of advantage for towns. Typically people would prefer to go to a town centre for hospitality and leisure activities rather than to a shopping centre. This is true of both night-time and daytime trade. In order for all of this to work, one needs professionals to manage it. Towns need a town management academy which will train people in managing town centres, similar to the way shopping centre managers are trained to manage shopping centres. If we do those simple things, they could make an enormous difference in terms of driving jobs and revenue back into town centres.

Dara Calleary (Mayo, Fianna Fail)
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I welcome the delegation from Retail Excellence Ireland, an organisation which talks but also acts. There is a lot of talk emanating from various retail organisations but Retail Excellence Ireland has achieved a lot. I wish the organisation continued success.

Mr. Fitzsimons made the point that the towns which performed best in the survey are those that do not have a major out-of-town retail presence. The public are saying that they like everything in the middle of the town. Those towns that have made the mistake of building the out-of-town centres have suffered the consequences, with the decline of their town centres and all of the associated problems. Is there any good example of a town that has fought back in that context and has reinvigorated its town centre, even with a large so-called out-of-town presence?

Mr. David Fitzsimons:

Yes, there are examples. Six months ago I was invited to Letterkenny to talk about the town team concept and incredibly, it has done just that. Letterkenny has a massive amount of retail space - it quadrupled during the good years - but its high street was desolate. A guy who runs an Eason franchise in the town invited me to speak at a conference attended by the local authority and many others. We formed a town team which now has €80,000 in the bank. The team has advertised for a full-time town centre manager. The local authority - fair play to it - gave the town team €50,000 to get going and a town plan is in place which is based on common sense. Part of that common-sense plan is a secondary street in the town that is rent- and rate-controlled where only indigenous local businesses can operate. The multiples are not allowed to operate there. That is a common-sense approach to using urban space to allow for new entrants to the market. The emphasis on the high street is also on local supply and local retail. Carlow and Kilkenny will soon launch similar initiatives.

Peadar Tóibín (Meath West, Sinn Fein)
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This is very insightful. Oftentimes one hears the large theory but not the detail. I have always been of the view that the retail sector has been ignored by the local authorities and the enterprise development organisations. While the county enterprise boards were generally good organisations, they did not play a role in the retail sector at all. In my experience, there was no relationship between retailers and local authorities. Indeed, each viewed the other with both caution and scepticism and considered the other as nothing more than a cost centre. Even when one tried to bring them together, the lack of a proper structure meant that it did not really work.

I worked as a business consultant seven or eight years ago. In Northern Ireland, town centre retailers were given training in marketing, including through the internet, merchandising, mystery shopping and so forth, which was of enormous benefit to them.

Often the hands of retail organisations are somewhat tied because they represent both out-of-town and in-town retailers. I believe a carrot-and-stick approach is needed to bring retailers back into the centre of towns. One of the competitive advantages of out-of-town centres like Blanchardstown is free parking, which a town like Navan cannot offer. It might be worth rating parking spaces. In that way, the parking spaces would become a cost to the large out-of-town retailers, who would then have to charge for them. That would go some way towards equalising the playing field. However, there is no doubt that such a suggestion would be very unattractive to out-of-town retailers. We also need to have a more progressive rates system that takes into account the profitability of businesses. That would ensure that small businesses can compete against larger companies such as Tesco, even if only for an initial three-year period.

Is the blueprint that Retail Excellence Ireland used for pilot towns such Carlow easily accessible to other non-pilot towns that might wish to run with it themselves?

Mr. David Fitzsimons:

It is readily available

Peadar Tóibín (Meath West, Sinn Fein)
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Is it available online?

Mr. David Fitzsimons:

Yes. We have also included it in the information packs given to committee members.

Peadar Tóibín (Meath West, Sinn Fein)
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I ask the delegates for their views on the rates issue. In our efforts to resolve the issue, it seems like a mission impossible because there are so many vested interests who do not want to deal with it. The Revenue Commissioners do not want to get involved because rating small businesses according to profit is very difficult. There is also an argument that if this were done, it would be seen as a business or corporation tax and would be very hard to sell to the business community, even if it resulted in no change overall.

Mr. David Fitzsimons:

I do not think two wrongs make a right. I went to New York to listen to one of the largest property developers in the world. He took the stage after George Bush and said that in 2006 the largest shopping centre had been built in the United States, but now shopping centres are no longer fit for purpose in terms of people's need for social engagement. The Deputy spoke about online retailing, which represents a huge opportunity for town centres in the future. We will all be at home tapping away on our PCs but will desperately need social engagement and community connectivity, and town centres are best placed to provide that. That means providing an urban space that is beautiful, which is what this guy does. He puts in waterfalls, seating areas where people meet and mix and so forth, and they come. There is no problem because people feel like shopping and eating there.

The solution is not to apply a rates increase to out-of-town retailers because that would not make societal or commercial sense. What does make sense is taking the needs of town centres seriously. Giving rates breaks to retail types in which a town is deficient is one solution. A town might have more than enough telecommunications outlets or charity shops but not enough fashion outlets. It should be able to go Zara, H & M or Pamela Scott and let them set up for free.

The rates revaluation process that is sweeping the country - ongoing in Dublin, Waterford and Limerick at the moment - is a tax on town centres because there is now a direct link between the rates set and the rent in the market. The highest rents are in town centres and not in secondary locations or business parks. I was in Waterford City to hear the announcement of the rates revaluations and I feared for the safety of the guy from the Valuations Office.

It was incredulous. If that could be stopped or rebalanced in some degree, it would be a meaningful intervention, but applying car parking charges to retail parks is not.

Peadar Tóibín (Meath West, Sinn Fein)
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Will Mr. Blackwell give us an English perspective on this issue?

Mr. Martin Blackwell:

We have a different view. Our organisation, ATCM, does not represent a sector. We do not represent the retail sector or the property sector, but our role is to look after and support town centres. The concept mentioned by the Deputy was part of our manifesto for town centres in 2012. The government in London did not take any notice, but we did pitch it.

Business rates is one of the major issues under discussion in the United Kingdom. I gave evidence to a business innovation schools committee at Westminster and said business rates, as they stood, were no longer fit for purpose. A property based taxation system in the current trading environment does not work any more. This is the reason companies such as Starbucks buy their coffee beans in Switzerland because they find a way to get around the property based taxation system. I do not pretend to know what the answer is, but if we want to bring new businesses through, we have to find a way to support them. Tax breaks are interesting, but we probably need to look at the wider picture of the cost of operating in a town centre. It is generally more expensive; it takes longer to get permission to do anything and it is more difficult to do anything in a town centre than in an out-of-town centre. Finding ways to redress the balance would be worthwhile.

Mr. Cormac Kennedy:

I represent a retailer that has a presence in both out-of-town and town centre locations and car parking charges come up for discussion. I do not genuinely think charging for parking in out-of-town centres will help town centres, rather it would be to the detriment of out-of-town locations.

When one considers the results of the survey and the responses to question No. 6, the rationale for somebody going to the town centre, the answer was car parking. The focus should be on getting retailers and the hospitality sector into towns. Sometimes the conversations are about car parking and rates, but this is probably an unwinnable argument to a certain extent because there needs to be a charge to run the town, but nobody wants to pay for it. As a retailer organisation, we would be in the same boat as anyone else, not wanting to pay that charge, but it must be paid for somewhere along the way. The focus should be on how to get retail and hospitality businesses to set up in towns. One attracts businesses to a location by creating the nice environment Mr. Fitzsimons described and following the examples Mr. Blackwell gave from the United Kingdom. Retailers will follow each other. If a large retailer moves into a town, other retailers will follow because they will feel the confidence behind them. If a large retailers leave a town, other retailers will leave also. It operates very much on herd instinct. The focus needs to be on this rather than other issues. I am not taking from the very important points made, butit would be of greater benefit to focus on the other side.

Peadar Tóibín (Meath West, Sinn Fein)
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Ideally one would like to grow the retail economy to a level that fills the town centre and provides a good living for out-of-town businesses. The difficulty arises when the retail business is not growing at a sufficient rate and when one wants to rebalance it, it becomes a zero sum game. If one wants to bring more people into the town centre, they must change their spending patterns to a certain extent.

I have heard anecdotal evidence recently that all the talk about water charges has had an effect on people's spending patterns. Even though the charge has not yet been applied, people now expect that they will have to budget for water charges. That was the case with the introduction of the property tax also. I would like to hear the delegates express the views of their members on these charges.

Mr. David Fitzsimons:

Most of the time budgetary interventions do not influence spending, but communication of budgetary interventions does. The timing of the property tax announcement by the Revenue Commissioners before Christmas did awful damage; it is likewise with some of the discussion and conversation on water charges. We have a solution that was presented at the retailer consultation forum last week and it is an unbelievable opportunity for the Government - a scrappage scheme. Dishwashers and washing machines that are more than five years old use 26 litres of water every cycle, whereas new washing machines and dishwashers use six litres. We are working on a document for the Minister for Finance, Deputy Michael Noonan to consider, on equipment that is more energy and water efficient. We want to try to have some incentive scheme to get old machines off the market and are also working with WEEE Ireland to get in new stuff. People all of a sudden will feel better about the water charges because they will be using less and will pay for less water. I hope the Government will see this as a significant opportunity for it, the retail sector and citizens.

Áine Collins (Cork North West, Fine Gael)
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I welcome the delegates. I wish to correct an earlier remark. I complimented Retail Ireland, but I should have complimented Retail Excellence Ireland.

Damien English (Meath West, Fine Gael)
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Will I call them back?

Áine Collins (Cork North West, Fine Gael)
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No.

I have had experience of what we have been discussing. Mr. David Fitzsimons kindly came to Charleville and worked with retailers. They set up a town team and the local council provided training. It has had a significant effect and does work. Charleville is a small rural town; it is not the prettiest town in Ireland, even though it has very good architecture. Signage was a major issue. One of the ideas that came from that experience was that towns that did very well in the Tidy Towns competition also did very well in the retail sector. I do not necessarily agree with all the talk about rates because rates need to be paid. I used to run my own business and would rather see money being invested in making towns prettier than rates being cut. We also need to look at signage. We have a great many plastic signs that are very tacky looking and give a bad impression. We have all spoken about retail offerings as being an experience. We need a range of retail offerings in towns; we need to have creches, nice parks and places where one can sit down, coffee shops and places to which one can go for lunch. As I remember from Mr. Fitzsimons's talk, during the week one buys for convenience but at the weekend one buys from experience. One needs to have a range of shops. In the small town in which I live we have a very well known butcher shop which brings a lot of people to the town. We have just spent €80,000 on refurbishing the square and planting new trees. One can see the effect on the town; it does work. That is where we should concentrate our efforts as opposed to discussing taxes. We have to pay taxes, whether it be water charges or property tax or an increase in income tax or some other tax. We should focus on seeing what we can do in towns rather than talking about the things we cannot do.

Feargal Quinn (Independent)
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I apologise for having to leave for a few minutes as something urgent arose.

I know the team very well and about the work they do. One of my hang-ups is the number of organisations calling on the Government or the council to do something. What I have learned about Retail Excellence Ireland is that it does it itself. That does not stop it from calling on anybody else to give a hand also. I congratulate it on this and it should keep up its enthusiasm. I do not know what the solution is to the problem of car parking. The main problem is that shopkeepers and their employees are the major offenders, if one does not have a charge. One probably has to charge for car parking. I think having a 15 minute charge is better than a two hour charge because it means that people can drop in and buy a newspaper, but it also means that if they are there for two hours, they can add another 15 minutes. I know this is happening in some towns in Ireland, but I learned about it in France and thought it was a good idea.

I urge the members of Retail Excellence Ireland to keep up their work, enthusiasm and, more than anything else, working together rather than asking somebody else to do it.

Mr. Martin Blackwell:

I will respond to both comments because they are linked.

I completely agree that free parking is not the answer. Parking needs to be at a cost that is relative to what one will get in retukrn. People almost make a mental calculation when they park and if there is a fee, they ask themselves whether it is worth it. On the work Mr. David Fitzsimons is doing with the members of Retail Excellence Ireland, one can get people to be the best retailers in the world, but if the offer is not right, it will not work.

That brings me to my central point which is summed up by the mantra we have been using for 20 years - vision, strategy, action plan. One will only get these right if one can get all of the key stakeholders together working around the table.

I am referring to the local authority, but it is also the Garda, the transport providers, retailers and so on. Together, they would agree how they wanted their locality to develop. This must be the answer. The solution will be different everywhere even though there will be some common themes, but getting people to work together is the only way to make a difference in the long run.

Damien English (Meath West, Fine Gael)
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Does Mr. Kennedy wish to add anything?

Mr. Cormac Kennedy:

To revert to the issue of shopping centres, Charleville was mentioned. The issues facing a retailer in the town centre would be different from those faced by a retailer in a shopping centre. The latter does not have to deal with planning issues regarding his or her shopfront. For town centre retailers, even minor works on their shopfronts present a greater issue. Tackling these small matters at Government level would assist such retailers.

In contrast to other sectors, it is funny that retailers have never been grant aided to open new stores in towns. If an IDA-backed company was considering creating 300 or 400 jobs in a town centre, a great deal of money and assistance would go towards that aim. Generally, however, such assistance is not available to retailers in large towns. If we want to restore towns and bring big retailers to them, we should consider encouragement through grant aid, as this would create jobs.

Mr. David Fitzsimons:

It is simple stuff. The solution can be found in every town. I will provide a brief example.

Damien English (Meath West, Fine Gael)
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There is no rush.

Mr. David Fitzsimons:

I visited Dunmanway for the first time after the Chairman's colleague, Deputy McCarthy, invited me. I arrived in a triangular town. While chatting over a cup of coffee, we stumbled across the solution. Just 1 km down the road there was a school of 2,000 children. I could not believe it. Everyday at 3 p.m., their mums and dads collected them and went home or travelled to a larger town. We agreed that the coffee operators in Dunmanway should have vouchers for free coffees to attract people to the town. We discussed the awnings over shops. One could see the beauty of the place and why people would want to visit it.

Be it in Dublin city, which the committee has spent a great deal of time discussing, or my town of Ennis, which I love, I want my kids to be able to go to town and enjoy themselves safely in the same way we are happy to let our kids go to Dundrum. If this is not the case in a few years' time, shame on us all.

Damien English (Meath West, Fine Gael)
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That was useful. I thank our guests for their presentations. We will revert to them in a couple of months' time, as this is an ongoing discussion. We hope to make a report at the end.

A major issue with grant aiding one bunch but not others in the same town is the possibility of competition displacement. The solution is probably the team approach that was suggested. Funding could be drawn down as a town rather than as individual businesses. Nearly all retailers are in business together but are also in competition with one another. It is difficult for enterprise boards and the like to grant aid them, whereas factories and businesses coming to an area are something new. We need to find a way around this problem. The message has gone out that retail needs support. The question now is how best to direct that support to those retailers that need it. The town approach is the only one that can address this problem. I hope that during our discussions we will be able to find, focus on and recommend a number of solutions.