Oireachtas Joint and Select Committees
Wednesday, 7 July 2021
Joint Oireachtas Committee on Jobs, Enterprise and Innovation
Challenges Facing the Retail Sector: Discussion
The second item on the agenda and the main business of today's meeting is a discussion on the challenges facing the retail sector following the disruption of the Covid pandemic. Recently the committee has given consideration to issues relating to the reactivation of the economy following the pandemic and has heard from ISME, ICTU and the City and County Management Association. To assist the committee today, I am pleased to welcome Mr. Duncan Graham, managing director, Retail Excellence; Mr. Keith Rogers, ECCO; Mr. Macdara Doyle, co-ordinator, retail sector group, ICTU; Mr. Gerry Light, general secretary of Mandate; and Ms Michelle Quinn, sector organiser, SIPTU.
Before we start I wish to explain some limitations to parliamentary privilege and the practice of the Houses in respect of reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. However, today's witnesses are giving their evidence remotely, from a place outside of the parliamentary precincts, and, as such, may not benefit from the same level of immunity from legal proceedings as a witness physically present does. Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if witnesses' statements are potentially defamatory in respect of an identifiable person or entity, I will direct them to discontinue their remarks. It is imperative that they comply with any such direction.
To commence our consideration of this matter, I now invite Mr. Graham to make opening remarks on behalf of Retail Excellence.
Mr. Duncan Graham:
I thank the Chairman, Deputies and Senators for their invitation to meet with the committee. I am joined by Keith Rogers from ECCO. He is a former chairperson of Retail Excellence. Retail Excellence is the largest representative body for the retail industry in Ireland. We have more than 2,000 members across various retail sectors, and the industry employs approximately 280,000 people throughout the country.
Since the emergence of the Covid-19 pandemic in Ireland in March 2020, retailers have faced an unprecedented level of disruption to their livelihoods. The vast majority of retail stores were shut for almost nine months in total, that is, nine months out of the past 15. Many could not trade at all. For others, huge effort and cost were invested in trying to pivot to online sales and delivery systems to survive. While contending with a major drop in income, retailers were obliged to invest in control measures to safeguard customers and staff while their stores were open, including Perspex screens and hand sanitisation units, while all were forced to reduce selling space to facilitate in-store social distancing. Retailers also had to struggle with the mixed signals and confusing messages as to how long the lockdown would last. Many of our members incurred significant expenses on season-specific stock ,which has had to be discounted as the seasons have moved on. In short, the Covid pandemic has not merely disrupted the retail industry but has decimated it. For example, at the end of quarter 4 of 2020, there were 2,000 more commercial vacancies in Ireland compared with the same period a year earlier. There have been several high-profile retail closures and exits from Ireland since last year, including Gap, Carphone Warehouse and Topshop. No doubt various factors influenced these decisions but there is no doubt either but that the impact of Covid-19 was a significant influence.
It is regrettable to note that these closures are a reflection of what is happening to retailers of all sizes throughout the country. When big name brands are involved, a closure announcement gets national attention. That is not so when the business closing is a small shop in a small town, but that does not diminish the tragedy for the individuals involved or lessen the impact on the community in which the shop is based. These smaller closures are happening every day. Technically, non-essential retail fully reopened on 17 May, but it is important to point out that the continued restrictions on the hospitality sector are having a significant knock-on impact on retail. In towns and cities, retail and hospitality have an extremely close relationship. People go to town not just to shop but also to eat, have a coffee or a drink and so on. While hospitality is still restricted, retail can only get by rather than thrive, so we are desperately keen to see hospitality fully reopened as soon as possible.
Meanwhile, Covid-19 has led to several major international retailers deferring planned investment in Ireland. Businesses such as sporting goods retailer, Decathlon, and homewares provider, Jysk, said in March this year that tough Government restrictions meant that they had been forced to re-evaluate their plans, and now there is no indication that the Government will go back on its original decisions.
There are several challenges which face the retail industry following the Covid-19 pandemic. Chief among them is the issue of rent. While many commercial landlords have struck fair deals with tenants who did not take any income for well over half a year, there are several examples of others who continue to pursue retailers for overdue rent payments in full. We believe that all landlords should, at the very least, be offering a two-month rent amnesty to commercial tenants, which would represent half the time retailers were shut during the third lockdown from January to May this year. In the absence of any leniency from landlords, we would ask the Government to consider introducing a mandatory mediation scheme through which landlords and tenants could settle disputes and move on. Were all landlords to demand overdue rent payments in full from their tenants, it is obvious that we would be facing the collapse of the retail industry in Ireland and a resulting economic catastrophe.
In a wider sense it is clear that the disruption of the pandemic has brought about a change in the very nature of shopping. We are starting to see a new trend, a mixture of physical and digital shopping. People have embraced multi-channel shopping over the past few months, perhaps browsing online and making a purchase in-store where possible, or vice versa. This is good news for larger businesses that can afford to invest heavily online, but has been a significant challenge for small businesses that do not have the time or resources to properly develop their online presence. Government initiatives such as the online retail scheme have helped, but in reality these are just a drop in the ocean for the thousands of businesses that now find themselves on the brink.
However, it is clear that, along with challenges, the pandemic has created opportunities for the retail industry, and for society as a whole. Covid-19 has given us a chance to reimagine what we want our towns and cities to look like. In recent years, city centres have been hollowed out by the rapid emergence of several large shopping centres in city suburbs. Our towns and cities are places where people should want to live and shop, as well as work. If anything, this pandemic has shown that we must invest in these places in order for them to survive and thrive. We have a huge job ahead of us, rejuvenating our towns and city centres. Figuring out how we can attract people back into city centres should be key goal of this Government.
There are other issues too. Brexit has not gone away for retailers. It still has the potential to cause prolonged disruption. Even though a deal has been done, it remains to be seen how logistical issues manifest themselves in trade between the EU and the UK. It will clearly have an affect on costs and supply chain, along with the added bureaucracy, so retailers will be keeping a very close eye on developments.
The retail industry in Ireland has never experienced a crisis quite like Covid-19. Thousands of businesses have already been forced to close their doors and many will not survive the coming months, as society begins to return to some form of normality. Considering the retail industry employs more than 10% of the country's entire workforce, it is beholden on us all to ensure its survival. After such an intense and deep shock, the industry and its staff now require major investment, resources and support from Government in order to emerge better and stronger
Mr. Macdara Doyle:
I thank the Chair and committee members for the opportunity to appear before them today. I am joined by my colleagues, Ms Michelle Quinn of SIPTU, and Mr. Gerry Light of Mandate, on behalf of the Irish Congress of Trade Unions' retail sector group, which I co-ordinate. The retail sector group is an all-island body that is comprising affiliated unions North and South, representing workers in retail and distribution sectors in both jurisdictions, including Mandate, SIPTU, Unite, Usdaw and GMB trade unions.
I would like to outline some key points of the campaign that we launched late last year, A New Deal for Retail and Distribution Workers, which sets out the need to see real change for workers in these crucial sectors, as a matter of urgency. As mentioned already, we are an all-island grouping and despite the differing currencies and the differing political structures, we see a remarkable commonality to the problems faced by workers in these sectors, North and South. If anything, the strength of those shared interests has been underlined and emphasised over the last 18 months. What is often forgotten - and I concur with the previous comments - is the size and scale and the importance of the retail sector to the wider economy. Prior to the pandemic, in this jurisdiction, it employed up to 300,000 people and it is one of the largest contributors to the annual tax take, contributing €7 billion in direct taxes alone, twice that of the financial sector. Clearly, the sector played a pivotal role in the economy prior to Covid-19, and will be a key driver of any post-pandemic recovery that we hope to put in place, but that cannot be a recovery that comes at any price.
Over the last 18 months, workers in the sector have suffered the shock of sudden closures and the loss of their jobs, while others have coped with a dramatic shift to online trading. Crucially, many thousands of workers in the sector have spent the last 18 months on the front line of the public health emergency, and have been transformed overnight into newly essential workers, without whom large sections of society would have ground to a halt. If the pandemic did us at least one favour, it helped to reveal that terrible hypocrisy at the heart of the modern economy, our shameful dependency on workers who are among the lowest paid and the most insecure in the workforce. In Ireland, according to the OECD, we have a low pay rate of 23%. The OECD average is about 15%. Our low pay rate is the third highest in the EU and applies to a disproportionate number of those employed in sectors such as retail and distribution.
In addition, there is a gender pay gap of up to 19%, which again impacts heavily on the high number of female workers in this sector. Retail is also the largest single employer of young workers and 36% of their number are on part-time and temporary contracts. However, these workers still face the same exorbitant childcare and housing costs that afflict all of us, and reflect the very poor social wage that exists here, relative to other EU states. Housing costs are now some nine times average earnings and the average house price in Dublin, the area of greatest housing need, is now beyond the financial reach of 85% of the population, which is a truly shocking indictment of housing policy over recent years. Threshold points out that average rents in Dublin are now €1,717.50 a month and upwards - that is not the highest, but the average - which is greater than the monthly income of minimum wage workers. Many lower wage workers have been entirely priced out of the rental and the housing market.
In that context, it is hardly surprising that retail workers alone account for 19% of all HAP recipients, the largest for any employment sector. When the pandemic eventually ends, many of the workers on whom we relied so heavily during these critical periods will face a very uncertain future in terms of employment and issues such as housing, given the underlying difficulties within sector.
The same arguments have been made very coherently by the ESRI and by the National Economic and Social Council, NESC, as part of what it calls the Good Jobs Agenda under its shared island initiative. The same case has also been made quite forcefully and frequently by the Tánaiste. It is our view that the living wage provides the crucial benchmark for any society that wants to think of itself as decent, and in the aftermath of the pandemic it should be our goal to ensure that workers in this sector can enjoy a proper standard of living. In this regard, the recent request made by the Tánaiste to the Low Pay Commission in respect of how we might progress to the living wage is to be welcomed.
As a society, we now need a detailed and robust conversation about these glaring contradictions and how we can transform bad jobs into good jobs and meaningful careers. Applause and praise are important, but they will not pay bills or find a place to live. What we need now is very concrete action on pay and conditions for workers in the sector and some very lasting and tangible recognition of the essential role they play. They need decent pay, they need job security and they need a voice at work, and that means collective bargaining rights across the sector. They also need to see a stronger social wage, particularly affordable childcare and affordable housing.
As a first step, there should be an immediate restoration of the joint labour committee across the sector, which would help at least establish a basic level of decency around pay and conditions. The support of this committee for this very tangible measure would be very welcome and very valuable.
Good employers have nothing to fear from this agenda. Employer and lobby groups that are often vocal about upwards pressure on wages might be better served directing their attention and energy at Government and the policies that make so many crucial services unaffordable for low wage workers. In tackling these issues, we have the opportunity to rebuild and to reimagine the sector as one that is characterised by decent work and by high employment standards. We need a new blueprint for the sector into the future and this would be best undertaken by a new, dedicated retail stakeholder group comprising all relevant stakeholders.
That is a call we have made repeatedly, or has been made repeatedly by the congress representative on the retail consultation forum, which is headed by the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Damien English. As I said at the outset, the applause has long since faded. It is time for action and for real change.
Thank you very much Mr. Doyle. I now invite members of the committee to discuss the issue with the witnesses. I remind members who wish to speak to use the raise hand function and, more importantly, to cancel it when finished speaking. The first person who has indicated to speak is Deputy Louise O'Reilly who has 14 minutes.
I thank the witnesses for their time and their presentations. I have read the submissions and a number of things jumped out at me. Certainly, the threat to jobs is one. On the flip side, we have to examine the kind of jobs these are. An opportunity exists, and we all have said it. Probably every member of this committee has at some point said that the pandemic has caused us to re-evaluate what we regard as the front line and who we regard as front line workers. They are not just doctors and gardaí. They are the people who kept us supplied, kept us fed and kept us going all the way through the pandemic. I would say to the representatives of industry and of the workers that we owe a debt of gratitude to those people who went into work when it was not safe, when we did not know the scale or the issues and when we were still getting to grips with the pandemic. The people in the shops and the people working in distribution and in the supply chain were still there while everybody else was trying to figure out how to deal with this. We should not let any opportunity go without putting on the record our gratitude and our admiration for those workers. It is good that we are now looking at the work they do and the essential nature of that work.
We have an opportunity post-pandemic to rebuild, and both of the submissions alluded to this. We need to look at how we are going to do that. To borrow a phrase from the US President, Mr. Joe Biden, "Can we build back better?". Building back better has to be about sustainable jobs and about jobs that can meet the cost of living. Mr. Doyle is right that the Government has a job of work to do to ensure that it controls the cost of rent, in particular in our capital but not exclusively. We know that over the last ten to 15 years successive Governments have facilitated this housing crisis and we now see that that is having an impact right across all of the sectors. I have said this on a number of occasions and I have said it directly to the Tánaiste and to Ministers in government. I have asked them not to give up on retail. I worry sometimes when the question is asked that representatives of Government seem to just say that retail is changing. It is changing but that does not have to mean the end of the shops on our main streets and the death of our city and town centres. Retail is changing but we need to be able to move with that.
With that in mind, I have some questions on rent, which is an issue I have raised many times. I am fearful for many businesses that when they pull up their shutters to try to work that there is going to be a big bill on the mat. I know the Government is saying that it hopes landlords will show forbearance. It has great faith in landlords but I do not share that. Perhaps Mr. Graham might be able to outline to us the extent to which the rental crisis is there and any discussions that he has had with Government specifically in relation to the mandatory mediation scheme. The words "mandatory" and "mediation" contradict each other but I understand the point that he was trying to make. Could he outline areas of best practice internationally and any feedback received from Government in this regard?
Mr. Duncan Graham:
I thank Deputy O'Reilly. We have been talking around this now for quite some time and it has been very evident over the last year. We have seen 2,000 retail outlets close their doors over that period. There has been much high profile retail closures that have been well pointed-out in media. The key things that we have approached Government around initially were that there needs to be some form of mediation. We are talking about something like the WRC or something that is put in place on a temporary basis whereby landlords and tenants can get around a table and where a legally-binding arrangement that enables something like a turnover-based rent to be put in place for a period of time to enable retailers to get back on their feet.
In terms of other things we have looked for, taking the last five months that we have just gone through, we do not feel it is appropriate for retailers to be saddled with 100% of the rent payment for that period. What is very evident is that some retailers are able to do deals with landlords, but this is not consistent across the piece. There are deals being done, and there are 50% off and better deals than that being done across the sector. Equally, there are landlords who have dug their heels in and are basically saying, "Read the lease; you owe us the money". That is resulting in these closures. Many of the retailers we have spoken with that have closed, the UK ones in particular, were in a difficult situation beforehand. Covid-19 and this rent crisis has put them over the edge.
In terms of the measures that we have taken, we wrote to the Tánaiste and to the Minister of State, Deputy English, during the course of last year. We have raised this regularly as part of the retail forum which ICTU is on as well. To date, the only thing that has come back from Government is a code of conduct that was introduced in September of last year. We need to see something more than that. The code of conduct really is not worth the paper it is written on in terms of the response from landlords, in particular. We need to see something that is a bit more legally-binding to prevent this rent crisis from gathering momentum.
I thank Mr. Graham. I have a few questions for ICTU. I, and Sinn Féin, absolutely support a JLC for the sector. It is absolutely necessary and I know that ICTU has produced a document and a plan on retail workers. Perhaps Mr. Doyle might outline where he sees this going and where he sees these jobs going. Is it possible? I keep saying not to give up on retails but, for God's sake, let us make them decent jobs.
I will share with the committee figures I obtained from the Tánaiste and Minister for Enterprise, Trade and Employment's office. Over a three year period, the WRC recovered €1,148,170 in unpaid wages in the retail, wholesale and distribution sector. That does not paint the sector in a great light and I do not think anyone would say that it does. When we talk about rebuilding, I would like to hear from ICTU its vision on how those jobs can be saved in the first instance but also on how we can ensure that they are decent jobs.
I note the reference to the housing crisis contained within the submission, and there is a job of work that has to be done by us here in this Parliament to control the cost of housing. We know who has been in government for the last 15 to 20 years, so we know where this has come from. However, we also know that this crisis has now reached its tentacles into every aspect of our society and it absolutely has to be tackled. Alongside that, it cannot simply be the case that wages must rise to meet the exorbitant cost of living. There has to be a consequent reduction in the cost of living but in terms of wages, it is a sector characterised by precarious work, long hours, etc. I would like to hear from ICTU how it sees this sector being able to develop, to grow and sustain the decent jobs that are so essential.
Mr. Macdara Doyle:
The most urgent thing we need to do is to "build back better". That was referred to here and we have all heard the phrase at this stage. There is an opportunity here because the immediate challenges arising from Covid-19 are not the only ones we face. We have massive challenges coming down the line in terms of automation and the online issue. There is an opportunity here to build back better by establishing that kind of stakeholder forum where all of the relevant parties come together. Rather than tackling this in a piecemeal way, where you take one measure at a time, you try to deal with them all.
You can deal with the immediate Covid-19 challenges, and with the longer-term challenges of automation, skills, training, the endemic low pay in the sector, but there is, as the Deputy rightly said, a wider issue around the social wage and the cost of living that has to be addressed as part of wider Government policy. There are big issues. If we could use this opportunity to develop that new blueprint with all the relevant stakeholders around the table, there could be a thriving, sustainable sector which could be characterised by decent work, high standards, good career progression and meaningful careers, instead of low pay and insecurity.
I might ask my colleague, Mr. Gerry Light, the congress representative on the retail consultation forum to add a few comments on that.
Mr. Gerry Light:
It is always important to identify areas of common interest and agreement. If we are serious about rebuilding the retail sector, if we can identify agreement and a commitment to that from early on, that is vitally important. It is very welcome to hear Mr. Graham talk about seeing the dark and the despair that has come out of Covid-19 as an opportunity to look at the retail sector and reinvent it in many ways.
I have long held the view, in my capacity as a trade union official for many years, that the retail sector has been treated as some kind of a Cinderella sector, insofar as the supports and the commitments that it has been given from a wide range of different Governments over the years. In comparison with other sectors such as manufacturing industry and so on, there is nobody looking to bail out retailers, whether a store that employs 300 to 400 workers, or one of the smaller stores Mr. Graham talked about. I pushed this with the Tánaiste before I became a member of that retail forum group. I have to say, in fairness, I believe there is widespread support for the notion of looking at the sector and understanding the challenges, in particular the challenges facing traditional bricks and mortar retail, and working together to try to rebuild a sustainable sector, built on new values and new standards. After all, what is good for the retail sector and what is good for the businesses within is good for workers and, as Mr. Graham said, for society generally, namely, the small towns and shopping centres and all the other aspects that need to be considered. They are all the key aspects.
We need to be serious about this. There is no point paying it lip service and then when it comes to the first initiative that seeks to increase or enhance workers' rights or participation, or to give them the best possible living standards and terms and conditions, saying that it is only feasible in accordance with what the business is able to pay. There is no point in us getting the standard response we have been getting down through the years. I spent five and a half years on the Low Pay Commission and I heard many submissions. The automatic response for many employers is that putting a cent onto the wage rate will cost jobs and will be damaging to the sector or to the relevant sectors they represent. However, the truth is that all the independent research that has been done through the years for the Low Pay Commission has debunked those scaremongering predictions. I do not believe that would be the case if we worked in unison and in respect to try to drive the sector into a better place. I do not think it is an issue of whether businesses can afford to pay decent wages and have decent terms and conditions but I think it is an issue of whether the market can afford it. We all know that the market is consumer-led.
I could debate, not in a very aggressive or adversarial way, the whole notion of where we are going to end up eventually with the online development. There was a rush to online during the first lockdown but during the second lockdown what we saw was a 1% difference in the months between June and October, a 1% increase when people could get back out and physically do their shopping again. We have also seen considerable bounce-back in some business across retail with the move back. Of course, we have heard the debate about the retained personal savings and that when the opportunity arises, there will be a real willingness to go out and spend that money.
While you could not ignore the impact of online shopping going forward, I do not think it is going to be the phenomenon people predict it will be. That is something we need to look at in terms of an overall view of the sector.
It is important if we are serious and committed to looking at his from everybody's perspective. From our perspective, we will do our utmost to ensure that the voice of workers is very loudly and strongly heard. If you make that commitment, one thing that the trade union movement will do, regardless of who you are, whether it be Government or employers, we will hold you to that commitment, and we will test you on that commitment every step of the way. That is what we are obliged to do.
There is a range of things that Mr. Doyle touched on in the submission that need to be done.
What I hear from both parties is a willingness to focus on rebuilding. As we are all aware, that when low income workers, in particular, have extra money, they spend it in the local economy.
Unfortunately, I have to leave the meeting a little early. I am going to get my second vaccine. It is an appointment I do not want to not keep, so I apologise. I will stay for as long as I can but I apologise for having to leave early.
I thank both ICTU and Retail Excellence for their presentations. What strikes me is that we are seeing the dilemma evident in the two presentations in that people are looking at the same set of circumstances through different ends of the binoculars. What I would be interested to know from both sides is what our committee can do to help get this strategy off the ground because we need a retail strategy to cover many issues, including the issues that have been ventilated but also the challenge of climate, the circular economy, the elimination of plastic from our retail chain, more sustainable methods of production, and so on. There are many tricky issues where retail will be at the epicentre for much of the change that is going to happen - for example, in the sharing economy. I can see both sides. I can see the precarious nature of some of the employment and, indeed, the threat of more of that, going by some trends in the sector, but also the difficulty of low margins. It would be interesting to see if we can see a few shared pillars of what that strategy might be, whether it be around pay and conditions and training or around the circular economy and the change that will bring. If there were some shared pillars of this strategy, our committee would certainly be willing to assist. To be fair to the Minister of State, Deputy English, he is an experienced and flexible person who would try to facilitate that move forward. How much shared ground is there?
On this mandatory request from Government, as I understand it the only way you can force the reduction in a contract is through court supervised processes. That is why our committee has just heard of a small company rescue scheme, and the Bill will go through the Houses. That will allow more informal ways of tackling these things.
On the issue of requiring someone to go to mediation, I am surprised that many of them do not go to mediation before court anyhow, but does it solve anything? If these landlords are not willing to get involved in codes of conduct, will having a Government requirement that they must go to a mandatory meeting of some sort change the outcome? That is the question I have. It is important to understand that sometimes the other side of the rent is often a pension fund. We have an image of landlords as people sitting back sipping claret wine or whatever, but some of these are people who have debts, so it is not all as easy to unravel as might meet the eye.
I would like to ask about this promotion. I agree there is going to be this retail experience and the bulk retail, which it seems will become increasingly separate sectors. What can Retail Excellence do to support a town centre first initiative? We have seen many of the big names vacate town centres.
Should Retail Excellence be promoting high street locations for some type of presentation to bring people back into the town centre, rather than deciding to go out of town for the cheaper rents and so on. Can we work together on this with Retail Excellence to see some quality in town centres? Much of what I see in town centres are the bookies and the pubs, and little else to attract people in apart from the hospitality sector.
Mr. Duncan Graham:
I will pick up those three points Deputy Bruton made and then I will ask Mr. Rogers to elaborate and give his thoughts. In terms of shared ground and what the Government could do, things like the online retail scheme, as I said, have been extremely well supported. The reality is that they have been oversubscribed in most cases. Last year €11 million was allocated for the scheme, but in the end €12 million was actually granted to businesses to help them develop. There has only been €5 million allocated this time around, and there is no current view that there is going to be any more money allocated to that scheme during the latter part of this year. We need to make sure that there is money to enable businesses to trade online as well as physically. We will end up with a retail industry that has both physical shops and online support. That is going to happen.
The reality is that we will also require less retail space in towns and cities going forward. One way to rejuvenate towns and cities is to bring more people back to live over the shop, if you like. This has been talked about quite a bit before but there seem to be some onerous planning restrictions that make that quite difficult at times. Going forward, I do not see a situation where retailers will have stock rooms on first and second floor levels in town centres. That could easily be used for housing. Increasingly, we will see retailers servicing both shops and online from edge of town locations. That sort of support would be important.
The other things that are happening, and where some of the big costs are coming through for retailers, and will continue to come through over the next few months and years, relate to Brexit and importing products. Much work has been done in terms of supply chains to ensure that rather than using the land bridge, businesses are now starting to import and use suppliers direct from northern Europe and beyond. We are very conscious that that has brought a cost.
Mr. Keith Rogers:
I thank the committee members. My message to Deputy Bruton is to give us a leg up. Covid-19 has been hugely difficult for the retail sector, for all the people who work in it and for the whole industry. What can we do? If we get into a support mode, the first thing we need is continued supports on the wage subsidy through all of this year and perhaps into next year until we realise what the post-Covid-19 scenario is like for us. The second thing is that we need to take our towns and cities seriously. We need every local authority to appoint a retail manager with a keen retail focus, to treat the town centres in the same way as we treat our shopping centres, where every shopping centre has a manager taking account of the retail mix, the day time and the night-time, to promote our towns and to incentivise business back in. We have a difficulty at the moment where Covid-19 has taken out a huge amount of retail and in every town, city and village, we are seeing incredible vacancy rates and empty sites. How can we be proactive about that? How can we incentivise retailers and businesses to expand their business? Can we encourage recruitment, like we did in the post-financial crash, with the Government paying a portion of the cost, so that business, while coping with the property costs, rent and everything else, can have a dig-out in this time of need to cover that cost? Perhaps local authorities can be inventive by offering rates waivers for the first year or two years to allow properties get off the ground.
I thank Mr. Graham and Mr. Rogers from Retail Excellence for attending today. I thank also Mr. Doyle, Mr. Light and Ms Quinn. It is great to see them as worked alongside them for many years.
There is very much a common agenda here in that we need to ensure the survival of the retail sector. It is the largest employer in the country, and one which is in every town, village, city and community. It is vital that every effort is made, and I share Deputy Bruton's view on the need for a retail strategy. It goes beyond the issues of rent and pay to the issues of sustainability, transport, access and all those other things. To pick up on what Mr. Rogers talked about, issues of planning and local authorities all need to be included. The congress proposal of a retail stakeholder group is very important and one that I will be supporting and pushing the Government to bring about.
I want to ask Retail Excellence about the very serious issue it raised regarding the rent. I want to get a better handle on what is happening with the rent review that is taking place. What share of those who have engaged in a rent review have been institutional investors or have been individual landlords, because understanding who is engaging and who is failing to engage should determine the Government response? On that vein, who is the worst affected? Are we talking about individual shops? Is it more a town or a city issue? What type of retail is affected? Perhaps Mr. Graham could shed some light on who precisely is affected, who precisely are the landlords - I am not asking for names now but the types of landlords - and where those shops are located.
Mr. Duncan Graham:
It is very varied. When we talk to our members we hear of examples where certain retailers have done deals in shopping centres and of other retailers that have been unable to do deals in the same shopping centre, so it is very dependent on the one-to-one relationship that retailer has with that centre or with that landlord. By and large, the issues being raised with us are more to do with the institutional landlords than they are with private landlords. Whenever you have an opportunity to get around a table with somebody local, by and large, that opportunity is being taken. It is not consistent but, by and large, it is happening that way. It is the shopping centres that seem to be causing the most difficulty with this. In Blanchardstown Shopping Centre, for example, you will see many empty units at first floor level, but equally, on Henry Street you will also see empty units, so it is extremely varied.
Mr. Keith Rogers:
The answer is on the high street. If you walk down Grafton Street, you will see 13 empty units while you will see 31 on Henry Street. If you walk through the towns of Sligo, Tralee, Clonmel, Dundalk or any town, large or small, the answer is in the vacancy rate. Typically, there are some institutional landlords doing deals, although they are the most difficult ones.
There are also individuals who may not be in a position to give the deals businesses need. In that regard, we ask the Government for its support to give us a dig out.
Having talked to local businesses where I am based in Dublin Central, I am aware a deal have been done with some businesses and other businesses have been refused a deal. This is a serious issue. It would be helpful for this committee and for myself if Mr. Graham's organisation could undertake a survey of its members and provide us with the specific detail of its findings. Otherwise, it will be hard to advance the type of ideas the organisation is promoting.
There is very much a common view that we need to reimagine what the retail sector will look like into the future. Mr. Graham referenced in his submission the opportunities the pandemic has presented. In terms of that changed retail landscape into the future, I want to get a sense of the number of staff who will be required. Will more or fewer staff be required? Mr. Graham said stores may not necessarily need the first or second floors as store rooms. With respect to staff, the level of employment is a factor with pay being a very important issue. We heard ICTU detail the serious issues facing low-paid retail workers. I do not know if Retail Excellence made a submission to the Low Pay Commission nor do I know its views on the minimum wage, which I would like to hear.
Mr. Duncan Graham:
Briefly, it will be changed. The jobs in retail will get broader. There are many digital jobs. We will see much movement of what were technically sales floor jobs to back office areas involved in logistics and the digital economy. That is already happening.
We made a submission to the Low Pay Commission. Our view was simply that we wanted to be given some space and time after all the upheaval we have gone through. Significant costs are being put on retailers. In our view now is not the time to start moving towards a living wage in too large a step but we are not saying we should not move forward on that. There is a need for meaningful jobs in retail and to develop managerial jobs, which will come from younger people who are moving into the sector. That is an exciting aspect. We cannot afford to start lumping in additional costs at this moment in time.
I thank our guests for their presentations. I want to focus on the question of a safe reopening for workers in the retail sector in particular. That issue has come to the fore and needs to come more to the fore. As our understanding of Covid has developed, the question of ventilation has arisen, it being a core way to keep workers safe. I would like to get a picture of the current situation in the retail sector. I note from Retail Excellence's opening statement the issue of Perspex screens was mentioned, which was advice given at an earlier stage of the pandemic. As I understand it, the latest advice is that Perspex screens are a problem and should be removed because they restrict air flow. What advice on ventilation does Retail Excellence give its members? Is Mr. Graham aware of any inspections by the Health and Safety Authority, HSA, regarding ventilation and of any improvement or prohibition notices being issued in that respect? That is a question primarily for Retail Excellence, although Mr. Doyle or Mr. Light might have a further comment to add.
Mr. Duncan Graham:
Certainly retailers spent considerable time and money early in the pandemic making their premises safe. Social distancing and all of those measures were put in place very quickly. Mask wearing was implemented on 10 August. It is very rare one would walk into a shop and find those working it not wearing a mask. Ventilation is more difficult in a large store compared to a small store where more often than not doors can be kept open and so forth. Retailers have done everything that has been asked of them so far to keep their premises and their employees safe. If that was not happening, we would see far more cases of Covid emerging in the retail sector. We would also see many more stores closing for short periods due to outbreaks of the virus. We are not seeing that. We did not see that at the height of the pandemic in January and we have not seen it to an great degree in supermarkets and other retail outlets during the pandemic. We take our responsibility seriously. Things have been opened up and there is ventilation where it is possible. All the other Covid protocols are very much in place and considerable money has been spent training people to ensure those protocols are in place.
I am not doubting the organisation is doing everything that has been asked of it. My question is more focused on what is being asked of it with respect to ventilation. What instructions, guidelines and advice has the organisation been given from the HSA or other bodies and to what degree are inspections taking place?
Mr. Duncan Graham:
The straightforward answer to that question is we have not been given that much guidelines on ventilation, if I am to be honest. Most of it has been on mask wearing, Perspex screens and all those types of issues. I am not aware of any major HSA input in terms of visits or anything like that on foot of which issues with ventilation were pointed out.
That is very helpful. That is precisely the information I am trying to get a handle on because we are weak there.
On a related question, Mr. Graham might have read an article in The Irish Timesyesterday about Belgium, which has introduced laws with respect to ventilation specifying that every indoor retail unit and hospitality unit needs to display CO2monitors and the laws in that regard. Does Mr. Graham have an opinion on that? Is that something, to which his organisation would be open, if the Government was to move in that direction?
Mr. Duncan Graham:
I might refer that question to Mr. Rogers in terms of his stores. From our side, I have not read that article in yesterday's edition of The Irish Timesnor was I aware of it. If it is a measure that is proved to of benefit, it is something we will need to consider. Mr. Rogers has a number of smaller sized footwear stores. What is his view on that issue?
Mr. Keith Rogers:
I am not sure it really applies to us. We have 19 boutique-style stores and we work with 250 other boutique-style stores across the industry. As was said, we have been very lucky in that we have kept our doors open in all instances. In many cases, the stockroom is on the first floor where there are windows at the front and rear of the building. In keeping doors and windows open we can keep the place well ventilated. We have had visits but they have been more about our Covid set-up, making sure we have adequate space and seating for customers, a reasonable distance between each seat and a proper queuing system outside the door and inside the door. We have been compliant. We appreciated those visits, particularly this time last year when we were coming to terms with what our obligations were and trying to train people. Truthfully, we have not had to look at ventilation systems at the size of our stores.
In small stores the ventilation system is precisely as simple as keeping the door open. That probably provides more than enough circulation of air in a small shop. The issue probably arises in the larger shops.
Could the ICTU representatives comment on the general issue of worker safety if there are matters that should be improved? Is ventilation an issue ICTU has considered in terms of the requirement to have CO2 monitors?
Mr. Gerry Light:
The Deputy has raised an important issue. It is one of the many issues on which we have had to come together to ensure the proper and full protection of workers as they go about their daily working lives. Ventilation is critically important. It has come into even more acute focus with regard to another group, in respect of which I will participate tomorrow, namely, the hospitality sector.
It is particularly important from the perspective of our bar worker members. It is a key issue, as are vaccinations and all the other measures that go into keeping workers safe in the workplace.
To put the situation in perspective, I will outline the height of the risk curve that retail grocery workers took from day 1 when we were all thrust into the great unknown and had to make things up as we went along. Two return to work protocols have been agreed through ICTU, employer groups and the Government. The focus must be on ensuring that we not rest on our laurels following their introduction. There must be a commitment from everyone, including employers. The unions need to tool up workplace representatives to ensure that we have properly trained Covid workplace representatives, as well as our traditional health and safety representatives, in order that there is a mechanism whereby if an issue arises, it is dealt with immediately.
Ventilation is important and the work on it is evolving. This issue not only applies to individual stores, but also to some shopping centres where there are mass congregations. From our perspective and that of ICTU - I know this from our direct involvement in ICTU - this is something that we will look into in greater detail and keep an acute focus on it. We will consider any new information that comes to light, for example, that to which the Deputy referred, and rely on it if appropriate.
I thank our guests for participating in this meeting. There has been a great deal of discussion about where the retail sector is, but I wish to discuss the technology revolution that we are experiencing, the consumer shift and how we will address this matter through national policy. We are talking about supports for retailers at a time when there is Government policy that actively promotes an Amazon centre in central Ireland, which will significantly disrupt consumer channels further. We saw this happen previously with large furniture retailers. There is a significant disconnect in the minds of consumers between this and the importance of supporting indigenous and buying Irish. Not all companies are trading in Irish goods. Rather, they provide services. However, we must consider this matter. There is a complete evacuation of retail from towns and villages. I will be going into the Dáil shortly to discuss trying to retain the post office network in rural towns and villages, which is key to keeping some level of infrastructure and economy going.
My first question is to Retail Excellence. I have received legal opinion that upwards-only rents are not protected by the Constitution. Has Retail Excellence plans to examine this matter? Has is planned discussions with the Government on it?
The small company administrative rescue process, SCARP, was mentioned but we are yet to see how it will work out. I would like to see businesses engaging early where possible.
I wish to discuss the dominance of multiples. Does Retail Excellence have any policy on trying to tackle it? It is a significant problem in the retail space, in particular where the purchase of Irish goods is concerned.
Mr. Duncan Graham:
The issue of upward-only rents is raised by members, particularly long-standing ones who are saddled with upward-only rents. We have pushed this issue previously. Mr. Rogers is probably more up to speed with it than I am, as it was raised ten or 11 years ago. We felt there was a way forward, but then we were told that there was not. We would be keen to examine ways of removing or changing upward-only rents.
Regarding the process the Deputy mentioned, the committee should take it as read that we want to engage early with that. We will take up any opportunity for retailers to be a part of it and to restructure their businesses as a result.
On the dominance of multiples, there will still be multiples. The UK multiples in particular seem to be the ones that are exiting the Irish economy, including the Arcadia Group last year with Top Shop and so on and the closure of Debenhams, which has been well reported. There has been a significant exit but that space is ripe to be filled by indigenous retail. We are a part of initiatives such as Champion Green, which encourages people to shop local and shop Irish. We were a part of it when it was initially established approximately two years ago as a green Friday idea related to Black Friday. We continued with it when it was launched properly last June. Through it, we are trying to increase opportunities to develop Irish retailers and put new retail entrepreneurs into pop-up shops around the country. In the latter regard, we see an opportunity to develop that entrepreneurial spirit and give people the chance to take units for short periods of time, test out the markets and establish businesses. We will continue to be heavily involved in that.
Mr. Rogers was involved in some of the upward-only rent discussions. Does he wish to raise any point?
Mr. Keith Rogers:
It has been a long-running battle. The former Minister and Deputy, Mr. Pat Rabbitte, championed the argument in his pre-election manifesto, as did the former Taoiseach, Mr. Enda Kenny, and the current Taoiseach shortly afterwards. None of them was able to deliver for us. In the early 1990s on, retailers were forced to sign up to 30-year upward-only deals. Many of those deals are still washing themselves out. We hope that the issue will fix itself in time, but it remains a significant issue for many retailers.
To pick up on another of Deputy Shanahan's points, I would tell people not to lose faith in retail. Retail has gone through a tough time and Covid has had a negative effect, but we are a resilient bunch, which we have proven during the many challenges that have come our way. There is a great future ahead. Over the past 18 months, people were locked out of retail for a long time. Since we opened on 17 May, though, they have come back, embraced shopping and enjoyed the experience of getting out, touching and feeling goods and being able to try on clothes. It remains challenging because many areas of retail that were not mentioned in our submission are still closed, but people are coming back. Shopping is the No. 1 hobby in Ireland and will continue to be so.
Regarding multiples, the largest growth area in retail at the moment is in small towns and villages, including craft and organic retail, with local shopping being supported. There are great opportunities, and it is important that our legislators understand this. We need a dig-out and support at the moment. We can work with our colleagues from Mandate and ICTU on supporting people to be better employers and supporting the recent legislation on promoting better jobs. We have proven that we can do the right thing in the past and can prove it again. We are proud that we paid every member of our staff full wages throughout the lockdown. We have got that back in spades in terms of loyalty and appreciation. We have not had a single personnel issue since reopening. This is against a backdrop where recruitment, job losses, roster niggles and so on are the greatest issues at operational level. There are great signs for our industry and I urge the Deputy to keep that, rather than the challenges, to the fore of his mind. With everyone's help, we will get through this.
I thank the Chairman for allowing me to contribute. I thank the witnesses for participating in this meeting. It has been informative.
I will go through a few points, buried within which will be a couple of questions, so the relevant witnesses might reply to me.
I pay tribute to the retailers large and small who have come back. I will follow up on the point made by Mr. Rogers. I know workers have made a huge sacrifice throughout Covid but we cannot forget retailers, particularly smaller retailers. The fact that they were locked out of their businesses for so long must have been hugely frustrating to them. I represent Longford. I know there was a huge uplift in the community when our traders got to open their doors again. It was a psychological lift for the whole community to see those shops back open. As a community, we were at one with those retailers. It is very important to point out that in the main, all our retailers are excellent employers. There might be some issues across the sector but in the main, our retailers are excellent employers.
I was interested to hear Mr. Light's observations on retail. I would concur with him. It has plateaued. It is not without challenges. With big businesses, it is easy to scale retail but it is increasingly difficult for small and medium enterprises to get out there and get the margins they require to make it work. A huge level of investment is required.
Regarding rents, have the witnesses carried out an analysis across the sector? I know they were looking for a two-month rebate on rents. Do they have any indicative information in terms of how landlords are treating Covid? How many of them have given a rent break? Many smaller landlords have in the main been very co-operative and are working with retailers but it is probably an issue in terms of institutional landlords.
In respect of Retail Excellence's submission, the challenges in retail are much more pronounced in rural Ireland. We have our town centre first strategy. For someone in rural Ireland, it is very frustrating to hear people talking about the over the shop concept. Anybody dealing with families looking for housing on a daily basis knows that very few of those families will put their hands up and say they will live over a shop on a main street. It is probably easy for politicians to say "Town centres are hollowed out. Let's put people back living over shops" but it is not the quick fix people think it is. At the same time, I do not expect retailers to be using the first and second floors for storage either. We must be more imaginative in our town centre first approach.
Does Retail Excellence have a view on getting more involved in the circular economy? There is significant opportunity, particularly for those retailers in rural communities and provincial towns where they might need to broaden and look at niche offerings. I take on board the point that more supports are needed for the retail sector.
Mentoring is a key issue. If we look at the way retail is changing across the globe, we can see that it is very much a case of experience shopping. People like online shopping but it does not give that experience. It is about what a retailer can do to give customers a better experience when they go in. What value can it add to its business? There is also an opportunity for employees in terms of upskilling. There is probably an opportunity to look at something like a mentoring package and a re-examination of how medium-sized businesses can upskill.
I am very interested in the idea of a retail manager. It is certainly the way to go. Could Mr. Rogers give some indication of what buy back he is getting from local authorities and the Department on that? Local authorities are working on their county development plans and subsequently their retail strategies but that is something we really need to push. It would be a key appointment across all our local authorities.
Mr. Duncan Graham:
I will respond to a few points raised by the Deputy. Regarding rent, I go back to the point I made earlier, which is that it is very varied. As this emerges and as businesses reopen, it will become very much more apparent as to where the issues lie in terms of those landlords who are playing ball and those who are not. We will come back to the Deputy on that issue.
The Deputy's point on the circular economy is very well made. A number of clothing retailers, particularly some of the larger ones, now have what are almost recycling opportunities within them. This will be a growing trend and is something we support. It is something the country should look at more. Bringing old clothes back into new retailers that can be recycled is starting to happen. Increasingly, we are seeing sustainable packaging being used by many new brands. This is happening with a lot of these new retailers, which are very focused on sustainability and the circular economy, particularly the younger retailers. We have run a number of webinars on this topic and will continue to support our members in respect of it.
We fully support mentoring. With more than 2,000 members across the board, we have a lot of very experienced and skilled retailers we can call on to provide those mentoring services. We have done it in the past and are in a very good place to help support that and the town centre first initiatives around mentoring. We are very willing to work with the Government on that one.
Mr. Keith Rogers:
I can give the Deputy a personal example. Estate agents go with the trendy centres. We were looking to expand some years ago and estate agents told us to stay away from Limerick city and that the Crescent Shopping Centre in Dooradoyle is where it is at. Retail Excellence organised an initiative with local government to promote Limerick city. We opened in Thomas Street in Limerick and got a better deal and better property costs. We have been in a store there since 2016 and are delighted with it. It is one of our most successful stores and most improved on a like-for-like basis. There are great examples of this. Michael Walsh, the city and county manager in Waterford, is the best in the business. It is an awful pity we cannot clone him. We need a manager to take responsibility for the town; look at the mix in it; see whether we have shoe shops, clothes shops, department stores and appropriate eateries and night-time and day-time outlets; and compete with shopping centres. Shopping centres and out-of-town centres, including those in Longford and the Deputy's constituency up as far as Carrick-on-Shannon, are dragging people out of towns and centres. We can promote our towns with events. There are great examples of this in the likes of Westport, Galway and Limerick. We created an initiative a couple of years ago with Carlow where people could be charged car park prices at the times they are coming anyway to incentivise them to come in during late afternoon when they do not come in and the car parks are sitting empty. There are loads of things that can be done. There are activities that can be done in link areas. The Deputy spoke about the circular economy and promoting events in the evenings or in parks or other public spaces.
I thank all of the witnesses. This has been a really helpful engagement. I acknowledge the positive comments from everybody. There are some really valuable ideas. I agree with Mr. Rogers that we must not lose faith in retail. He has shown real leadership in his comments as has his colleague, Mr. Graham. I agree entirely with the point that we need to get people back into our city centres. We need an all-of-government approach in terms of building a proper long-term strategy for retail. Therefore, I would certainly support the call for a retail stakeholders forum. It is very important that this committee endorses that call as well.
I am very conscious that we have had a lot of really good comments from Retail Excellence. I want to give my colleagues in the trade union movement an opportunity to respond.
I address my former colleague Ms Quinn in particular and invite her to comment on two aspects. First, on careers - and I also welcome comments from the employers side on this - it strikes me that there is an issue in the industry around being able to attract people. There are issues around job security and low pay. I would like Ms Quinn to give a trade union perspective on that. Will the representatives from the unions speak on the importance of collective bargaining. They cited that issue in particular. Will they tease out why it is so important in moving forward and improving the sector?
Ms Michelle Quinn:
On career paths, it is vitally important that we attract and retain people both across retail and distribution. Employers are struggling to retain people due to the precarity of work in the industry. We do need a career path, sustainable jobs, decent pay and conditions. The only way we can address those issues is together. That would be best done initially by the retail stakeholder group. We have strengths, weaknesses, opportunities and threats in reshaping the industry into the future. The sooner we begin to have honest and open conversations in relation to how we best address those challenges and opportunities the better. I entirely agree with Mr. Rogers that we cannot lose faith in the sector. There are good people there. There are people who wish to remain within the sector. We need to support and encourage them. We need mechanisms whereby the employer and the worker both have supports. One of the manifestations of supports for workers would be the re-establishment of the JLCs across retail. Collective bargaining would play an essential part in establishing a level playing field for workers in Ireland, not only in the retail sector but across the board. I am struck by the contributions today that we have more in common than not. We need to begin that discussion at the earliest opportunity.
Deputy Bruton asked a very profound question in his opening remarks, namely what do we need the Government to do. The resolution of this issue, which is complex and multifaceted, requires a robust acknowledgement that the only solution will be arrived at by working together. There is no longer a place for a silo mentality, if there ever was one. If the pandemic did anything, it levelled the playing field for us all whether we liked it or not. If you stand back and look, whether from the point of view of employer groupings or the worker representative bodies, you can see we are all in the same boat. How we got in the boat is academic. We need to shape a future where we are all part of the solution. I know our members - and I am sure that Mandate and Unite are no different - have a real desire for us to forge with all stakeholders a sustainable future for retail and distribution. They will play a part, I am sure, but we need to demonstrate that we have the collective will to put in place mechanisms that support retail and distribution into the future, given the change in nature of retail, including the rise in online shopping, which is here to stay because the way the public shops has changed for ever. Yes, there is a significant place for bricks and mortar traditional retail but we need to look at a mix of how we address the rise of online shopping and how we retain traditional retail.
Mr. Rogers observed that the public has flocked back to retail and supported it. It is one of Ireland's pastimes and we need to ensure we sustain that. Part of sustaining that is building careers where people see they have secure jobs with decent pay and conditions and a career pathway that takes them from the door to something more meaningful along the way. Many may not choose to have a career path within the industry, they may be quite happy in their current environment, but we owe them the potential to have a career path should they choose to do so. One of the great challenges now is the retention of employees generally. Covid-19 has caused many people to reflect on their lives as they are and reimagine what the future looks like for them. People in retail have great interpersonal skills from dealing with the public. I imagine that, as time goes by and the economy reopens, those skills will be highly sought after by other employers and we run the risk of losing people from retail. Rather than risk that wash out of people from within retail with that skill set to other employers, we need to demonstrate that there is a career path and a meaningful way of earning a living within the industry. That will be enhanced by the initial step of restoring the JLCs.
It will be further enhanced by the long-sought-after collective bargaining mechanism. It behoves us all to embrace that thorny issue in our deliberations within the retail stakeholder group. Mr. Graham stated that if we are going to reimagine retail and distribution, we have an obligation, collectively, to get it right. There are a number of things we need to put in place in order to ensure that the journey is as important as the destination. The only way we can do that is by working together. The employer groups are aware of the challenges, as we are , but may have different perspectives on those challenges because they may manifest themselves in a different way. That does not stop us from having meaningful and robust conversations that lead us to a joint destination. I am more than anxious to have that discussion.
I want to return to my original questions, which could only be partially answered. There seems to be a consensus between both sides that we need a strategy and that the five pillars of this revolve around transition problems, pay, conditions, education and training, location, planning, flexibility and support from councils, digital transformation and the circular economy. Those five pillars seem to be agreed. Can the committee simply articulate that as a way forward or are there institutional or structural barriers that either side see to our articulating that or seeking to address those with the Minister of State, Deputy English, who is taking the lead on this?
I do not understand how this mandatory proposal will operate. Is it mandatory for landlords before they go to court to engage in a mediation process or does it seek to oblige them to settle on some particular outcome that an arbitrator other than a court feels should be the 50% or whatever? They are in two very different categories. One, under existing law, has to be done through the small companies rescue plan where there is some recourse to the courts where someone does an assessment of viability etc. as precursors to a cramping down of the rent or whatever. That seems to me to be the only way we can do that. That is why we have been treating this small companies rescue as an emergency piece of legislation. This committee did not undertake any scrutiny of it because we felt it was sufficiently important. What exactly is Retail Excellence looking for in this context? The advice seems to be that the Government cannot just declare 50% rents, and off you go.
Mr. Duncan Graham:
To answer the Deputy's second question first, this came out of the code of conduct that was put in place in September. The bones of it are in that code of conduct. The issue we had was that it was not being used. We wanted to make sure the forum was being used fully and that there was an obligation to settle, to go back to the point made by the Deputy. The small companies rescue plan has since been put into place. It may be possible for those two aspects to be bolted together. It is currently very evident that there is no fully independent body to deal with issues a landlord has with a tenant and the only option is to go to court. There is no stepping stone in that regard and that is why many of these issues currently end up in court, with significant associated cost, resulting in businesses closing. We were looking for such a stepping stone to be put in place. The code of conduct is not considered strong enough or to have enough teeth to be able to bring people around a table to get a settlement in the first instance.
I ask the Deputy to remind me of his other question.
My other question was whether there is now a consensus between the two sides here such that they could go to the Minister to say a strategy needs to developed under five pillars: transition problems, pay conditions and training, location planning and support from local authorities, digital transformation online and so on, and the circular economy. Those are issues on which everyone is agreeable but there is something of a stand-off between the two sides in respect of whether there are preconditions or whether one side or the other gets engaged. Is it possible to say there are no preconditions and that if this request is made, perhaps there could be an effort to support such a strategy being evolved?
Mr. Duncan Graham:
Certainly from our side, I do not see any preconditions in that regard. It is a good step. The Deputy referred to five pillars but there may be more or fewer. The points he has raised are valid. I do not see any reason we cannot move forward on that basis.
Does Mr. Rogers wish to come in on this issue?
Mr. Keith Rogers:
I completely support what Mr. Graham has just said. I do not see that there is any difference or any preconditions. What we are discussing is a mechanism to support retail until it gets back on its feet. There are several ways that can be done. One is to support a recruitment drive. The State can play a role in that regard and partly fund it.
There has to be an incentive to encourage retailers to expand and fill the vacant spaces around the country. I do not wish to disagree with Deputy Shanahan but there is a great opportunity to partly fix the housing crisis with apartments in every town, village and city, as we see in cities all over the world, through an incentive tax initiative to get landlords to upgrade the upper floors of their buildings. That would pay for itself and it would be a great initiative to get people back into towns. The planning system and the craving to expand retail in the past 30 years has brought new competition outside town centres. Covid has given us an opportunity we did not seek to fix towns and make it more appealing to live in town centres. We have a chance to exploit the current support for local businesses, to help start-ups and to fix a large part of the housing crisis. The opportunity we have currently is the best we have ever had.
Mr. Gerry Light:
May I give the perspective of workers in response to Deputy Bruton? I was probably one of the first people to raise this issue, which I did with the Tánaiste directly and the two relevant Ministers of State when I met them as a direct result of the significant closure of Debenhams. From that point on, I have taken the view that we need a broader strategic approach involving all stakeholders, including me and others on the retail consultative forum. We are agreed on that in broad terms. That is a really important piece of work and it is vital that the committee take on board the need to push it on with a sense of urgency. It is taking a little longer than it should. We were given a commitment at the forum that the officials are preparing a piece of work that may be ready in autumn. My concern is that we need to really focus on the challenges facing the sector now and the great unknowns that are down the road, not only the ongoing issues resulting from Covid, but also those arising from Brexit. I ask the committee to bring a sense of urgency to that work.
As regards stand-offs or disagreements, engagement starts with understanding the perspective of the other side and then trying to identify common ground which can lead to a potential shared benefit. That is the type of approach I will be taking into the committee and any work I do directly or indirectly with employers' representative groups or employers. I refer to that sense of urgency. I do not disagree with any of the headings set out. Obviously, Mandate focuses on the need to put centre stage the issues of workers' terms and conditions, sustainable careers and so on. We are up for it. The work needs to happen sooner rather than later.
I refer to the remarks of Mr. Rogers. I agree with him 100% in respect of the idea of a retail manager. He referred to the significant work that has been done in Waterford. I commend Michael Walsh and his team there. I point out that Waterford is the oldest city in the country. In the context of incentives for doing up buildings, there is a particular problem in Waterford as much of the commercial heartland is made up of very old stock. Many of the premises are listed buildings and for many retailer it is just not economically viable to take on that task. Government policy comes very much to the fore in this regard in terms of infrastructure, planning and access. That is a problem for all towns, villages and cities.
Beyond that, one of the other problems in my city of Waterford is the whole viability of every sector. They are totally dependent on good value jobs. There is a far deeper national conversation to be had about the importance of having vibrant jobs. One can see from areas such as Kildare and south Dublin how that drives investment and consumption.
I wish to reflect the positivity that has been referenced this morning. The idea of a group stakeholder forum is very important but it must have teeth. Deputy Bruton addressed the issue of rents, landlords and so on. That is one of the issues that has to be tackled from a financial point of view and it is the prerogative of the Department of Finance to consider that. That is where we need to go. We need to ensure there is high-level access to the Ministers and try to get three or four key incentives or initiatives off the ground. If we can do that, it will certainly go some way towards addressing the issue of rents and rates, as well as the need, referenced by Mr. Rogers, to keep employee supports going in the sector for another while in order to allow people to get back to a viable footing. I will give full and wholesome support to that, as, I am sure, will the committee. It is the best way of securing well-paid jobs and employee conditions.
Mr. Gerry Light:
It appears the meeting is probably drawing to a conclusion. I am certainly not an expert even though I have worked around retail for most of my working life and have been directly involved with it from a worker representative perspective, but one of the great challenges for retail and retail representatives as we go into the future and some of the great unknowns and challenges we will have to face is the need to think differently in terms of how they conduct business. Grocery and convenience retail in particular has traditionally been built around a model of high volume and low margins, as has been noted several times during the meeting.
In my view and that of others, that kind of price-led proposition, as opposed to a value proposition, is unsustainable in the long term for operators. Now is the time for them to grasp the opportunity to play to their strengths through the provision of excellent customer service, accessibility, quality-led offering in store and positive community engagement - all that kind of stuff. It is our view and that of others that a price-led strategy leads to staff suppression. A value-led strategy, such as the one I have outlined, with customer service and proactive community engagement at its heart leads to investment in staff, their skills wages and working conditions and improved staff retention and motivation. When I say that others hold those views, such views were articulated recently by the head of the retail sector in the Bank of Ireland.
Those are the type of challenges we face. They are not insurmountable, as Mr. Graham and Mr. Rogers have said. However, it will be a huge challenge for all. It is a great opportunity and it would be unfortunate if we did not grasp it.
I wish to follow up on a point that I referenced previously. I led a delegation to the Tánaiste recently from the Regional Group around a new buy local campaign which the Government has committed to put money into from July 2021. I would like to see everybody actively pushing and promoting the idea of indigenous genuine buying Irish where we can. We must get that message out. With the economy opening up, it is most important that we highlight the need for as much money as possible to remain circulating within this economy rather than gravitating to international markets and online shopping and all of that.
I wish to compliment all of the speakers. Mr. Light is right that we are reaching a conclusion at this point in time. With that in mind, I wish to offer the floor to Mr. Doyle, Ms Quinn and Mr. Light for any final comments they would like to make. I would particularly like to highlight the crucial role that women play in retail. We know that they make up the majority of workers in the sector. As has been highlighted in the submission to the committee, we also know that challenges remain in respect of the gender pay gap that exists in this country in particular and the issues of insecurity that have been raised before. I offer the floor to the representatives from the union side in terms of balance before we finish.
Mr. Macdara Doyle:
We have reached a certain degree of consensus here. It is welcome and it is one of the reasons we have these sort of engagements. We all know and acknowledge the fact that the sector was facing huge challenges even before the pandemic and they have been exacerbated. We have heard today that what we need to do ultimately, to meet those challenges, and what retail employers need to do, is to make the sector an attractive place to work. People need to want to go into retail and be drawn into it as a place where they can see a good and decent career where they can earn a decent standard of living. That, of course, goes back to the wider social wage costs that we see in terms of housing and childcare. They are not costs for the employers to meet, obviously, but there are wider issues around the social costs that need to be addressed.
Deputy Bruton asked earlier if there were two immediate things that could be done. Some of them have been addressed. There are immediate things that could be done. The committee could immediately back the restablishment of the JLC for the sector as a first step towards establishing that kind of basic threshold around pay and conditions. That is the first incremental step towards making the sector a place of greater job security, bringing people back into it, attracting workers back into it and giving them meaningful careers. As has already been suggested, the second action would be to back with urgency the establishment of that critical retail stakeholder group that would be tasked with developing the blueprint for the future of the sector and to deal with all of the issues that are out there. In terms of the wider issues, including the digital transition, the automation and so on, I remind the members that the National Economic and Social Council produced a good report in 2019 on how we manage the digital and climate transition as a society. It applies to all sectors of the economy. As far as I know, it has not been touched in terms of Government recommendations or action. Those are two actions that can be taken immediately. If the committee could add its voice to that, it would be extremely helpful for us. Perhaps my colleagues want to comment.
Mr. Gerry Light:
To be clear, and it has been mentioned a few times today, we talk about the statutory wage-setting mechanisms. I was one of the founding members of the JLC many years ago that existed before it was deemed to be unconstitutional and was challenged by a number of employers - not all employers, by the way. It worked very well for the sector for the vast majority of its years. It covered the retail grocery sector. On the other side was a registered employment agreement that covered the drapery sector, which also worked very well for many years in respect of engagement between the worker representatives and the employer groups. We have put out many calls over the last number of years seeking re-engagement now that the JLC structure has been deemed to be constitutional again. Alas, those calls and requests for re-engagement have fallen on deaf ears. As Ms Quinn said earlier, it is the pathway to getting to a better place in respect of the engagement of workers, giving them a sense of engagement and a say in their place of employment. Collective bargaining is a pathway on the road to that. It is certainly something that needs to be considered as part of where the sector goes next. As we said in our submission, as has always been the case in the past, good employers have nothing to fear from it. Mr. Rogers provided a good example today of the immeasurable return that employers get from employees if they treat them fairly and look after them when they are in greatest need. It is great to hear Mr. Rogers talk about the response and reaction of his employees. It does not surprise me; I have always found it to be the case through the years.
Ms Michelle Quinn:
On the employee engagement piece, it is vital within retail, especially because we are going to try to reimagine and reshape the future of retail. It is equally important in all other employments. One of the elements of our ultimate success will be the role that the employees themselves play and their contribution. I have no doubt that our members are up for the challenge. They simply need the opportunity and they need us to assist them in shaping the future and delivering on decent, secure jobs and addressing whatever challenges that requires along the way. We are happy to work with them to do that.
That concludes our consideration of the matter today. I thank the delegations from Retail Excellence and ICTU for assisting the committee in its discussions. We will follow up. We all agree on and understand the urgency of the crisis facing retail and the triple attack that is coming, in the shape of Brexit, Covid-19 and online sales. We must look at that. We will do our best to support the idea of establishing a retail stakeholders group as quickly as possible. Many positive comments were made by both the workers' representatives and the employers' groups. We will take those comments on board. I will read all the comments again and we will follow up on it.
I thank all who contributed to the meeting. It was a most productive discussion, like other meetings in the last few weeks. I thank the members for participating in today's meeting under the exceptional circumstances of Covid-19 restrictions. Apologies for having to curtail some speakers, our time was limited because of Covid restrictions.