Retail Excellence Ireland has called on the Government to indefinitely pause any increases in the minimum wage.
The body has warned that retail businesses are facing an “intensely difficult” commercial environment.
The statutory minimum wage increased by 38% from January 2020 to January 2025, from €9.80 to €13.50.
Retail Excellence Ireland also called on the Government to reintroduce and expand the Increased Cost of Business scheme, which closed in May last year.
The scheme allocated €257 million for SMEs in October 2023 as part of Budget 2024.
It offered eligible businesses a one-off grant payment as a contribution towards business costs based on the value of their commercial rates bill.
“We welcome the Government’s decision to pause the introduction of the living wage until 2029, but we also need to see a commitment from it not to increase the minimum wage even further,” said Jean McCabe, CEO of Retail Excellence Ireland.
“The reintroduction and expansion of the helpful Increased Cost of Business (ICOB) scheme would also make a meaningful difference and help keep retailers’ doors open,” she added.
REI today published a report on the retail industry by economist Jim Power – ‘The Cost of Doing Business: Ireland’s Retail Sector in a European Context’.
The report shows that Ireland has the second highest minimum wage among the EU-27, and the seventh highest standard VAT rate.
“The operating environment for many retailers has been intensely challenging in recent years,” said Mr Power.
“There has been a massive escalation in the costs of doing business, including energy costs, insurance costs, labour costs, and compliance costs.
“Furthermore, retailers are generally very labour intensive, so labour costs and other labour market regulations in areas such as paid sick days and parental leave impose an inordinate financial and logistical burden,” he added.
Where comparable data is available, Mr Power said it is clear that the cost of doing business in Ireland is very high compared to our EU peers.
