Call for government to implement longer term reforms to reward investment

Northern Ireland retail and wholesale activity is worth £8.625bn to the economy and sustains 148,553 jobs, according to a new CBI Economics research.

Backed by the Northern Ireland Retail Consortium (NIRC), the findings also revealed that Belfast alone contributes £2.312bn to that total.

The CBI Economics was conducted on behalf of the CBI and its retail members and revealed that retail and wholesale activity is now worth £352billion a year to the UK economy. It also supports one in five of the nation’s jobs, with 5.7 million people employed within the sector or its suppliers.

All of this adds substantial benefits to the public purse, with the £50billion retailers and wholesalers pay nationally in taxes enough to fund 110 new hospitals a year.

Yet the fallout from Covid-19 and war in Ukraine continues, they believe, to weigh heavily on the sector, and with the current rates holiday due to end in the spring, this risks plunging many firms into a fight for survival.

In response, the CBI and NIRC is urging government to implement longer term reforms which reward investment.

The CBI is also keen to see greater flexibility in the Apprenticeship Levy, a move which could have an enormous impact on a sector which already spends £4billion a year on training. This amounts to a tenth of all training spend in the UK.

Together, these measures could generate renewed optimism and investment in a sector which plays a vital role in Northern Irish communities, the wider economy and the growth prospects for UK plc.

CBI Northern Ireland director Angela McGowan, said: “Retail and wholesale businesses have remained at the epicentre of every economic ecosystem in Northern Ireland throughout the crises of the pandemic, war in Ukraine, supply chain disruption and surging costs. The sector has often been the first line of defence during these economic headwinds, and continues to prioritise supporting households, as well as their employees, through these challenges.

“With economic growth now a national imperative, the industry is once again leading the charge. Retailers and wholesalers continue to invest heavily in training their employees; they not only decarbonise their own operations, but help their customers reduce their carbon footprint too; and they’re levelling-up in action, as anchor points on Northern Ireland’s high streets.

“Amid unprecedented levels of inflation and a cost-of-living crisis, it has never been more important to have retail and wholesale firing on all cylinders.

“Longer-term reforms which encourage investment and fresh thinking on the Apprenticeship Levy can help future-proof the sector and spur further growth.

“While this is a fragile moment for the economy, and the immediate focus is rightly on restoring macroeconomic stability, there is real ambition within retail and wholesale to help unlock the huge growth opportunities for Northern Irish businesses. They know the right actions now mean we can look forward to a 2023 of promise, potential and prosperity.”

Mohammad Jamei, director of CBI Economics, explained: “The retail and wholesale sector has undergone significant change over the recent decade and is on the cusp of digital transformation. It has also been a key sector delivering for its customers and its employees throughout the challenging times of recent years.

“The sector therefore has a lot to contribute both in overcoming short-term challenges and in creating future economic opportunity; driving technological advancements to keep ahead of consumer need, and creating transferrable digital skills to safeguard employees’ future and enable their progression.

“As such, we were pleased to work with businesses in the sector to build the evidence around the myriad ways they contribute to the economy, to society and to local communities. We are excited to share our findings today and we hope it kick-starts open and constructive conversations between business and government on how to work together to ride out the difficult times ahead and create long-term prosperity.”

David Lonsdale of the NIRC, added: “The CBI’s new report demonstrates the enormous economic and social contribution that the retail industry makes to Northern Ireland’s communities.

“Retailers have shown tremendous fortitude and resilience to come through the tribulations of the past few years, continually adapting their business models at pace to meet evolving customer expectations.

“If the industry and the broader ecosystem it supports is to flourish and fulfil its potential over the decade ahead then change is required from policy-makers. It’s crucial we see a more strategic and collaborative approach from government towards nurturing the growth of the industry, coupled with concerted action to reduce the burgeoning cost of doing business. This will help retailers keep down prices for customers, rejuvenate our high streets and city centres, and sustain tax revenues for government.”