How Irish retailers are doing globally – and how you can up your game

Even before COVID-19, it was becoming increasingly clear that physical shop-based retailing was struggling in this modern world. While many physical shops and outlets will certainly return to growth, it is a multi-channel based approach that appears to be the saving Grace for all those balancing books at the end of the month. Thankfully, Irish retailers are listening – and a pivot to e-retail has kept the lights on, and then some, for a number of smart sellers. 

Ireland has, once again, proven its worth when it comes to global innovation by way of the pandemic, so much so that we are now ranked fifth in the world for global exports of Covid 19-related goods, according to the OECD.

A recent report from the OECD revealed that exports of COVID 19-related goods are concentrated in a few key countries. The top five global exporters, which together account for 49% of trade, are Germany, the United States, Switzerland, China and Ireland. This report backs up the findings of a previous survey by StartupBlink, a Swiss-Israeli producer of global startup ecosystem maps, that named Ireland as sixth in a global ranking of countries responding best in terms of innovation to the pandemic.

Irish retailers continue to thrive

This trend continues to today, where COVID-19 restrictions wane, as traditional retailers continue to deliver a strong performance according to a recent Sector Development Insights report from Bank of Ireland’s head of Retail Sector Owen Clifford. According to Clifford, grocery retailers continue to thrive with the latest Kantar data outlining that the average household bill was around €250 greater in the twelve weeks ending 18 April 2021 than in the equivalent pre-pandemic period in 2019. The data also highlights that Irish consumers are becoming more comfortable visiting supermarkets due to the vaccination roll-out with a 9% increase in shopping trips recorded in the prior four weeks. The over 65s are leading this return and increased their visits to bricks and mortar stores by around 14% compared with this time last year.

And the data comes to life in the form of a report from Swedish furniture giant IKEA who recently stated that their Ballymun store was the busiest of any of the Swedish furniture giant’s outlets worldwide when it reopened its doors to customers after Covid-19 lockdown restrictions on May 17 last. According to the Irish Times, the Ballymun store was “the highest performing” of the group’s 378 outlets across 30 countries on May 17, even with some pandemic restrictions still in place. Before the pandemic the store could accommodate 6,000 customers but on its reopening day the capacity was limited to 1,000 at a time with “social distance wardens” in the store keeping people apart. The performance on reopening day was surpassed four days later when Ikea Ireland recorded its busiest day of trading since the pandemic began with 7,000 customers passing through its doors in Ballymun.

Similar can be said for Centra, Spar, Mace and Aldi, who successfully pivoted to online retail with delivery services like Deliveroo and JustEat catering to those based at home during the pandemic. While restrictions remain lifted for shopping and retail at present, these convenience retailers continue to profit from their partnership with delivery giants and are putting in future plans for a delivery-trusting world. 

A recent uptick in consumer comfortability was also noted for Supervalu, who retained its position as Ireland’s most successful supermarket at the world’s largest and most trusted food and drink awards, Great Taste. 

Online has doubled in the last year

Retail is Ireland’s largest industry and the largest private sector employer, employing almost 300,000 workers as of last year. According to Retail Excellence Ireland, the largest representative body for the retail industry in Ireland, the sector contributes €30 billion in total sales and 14% of national employment. Given this significant economic contribution, Managing Director of Retail Excellence Ireland, Duncan Graham, told RTÉ national radio that more had to be done to ensure that Irish retail retains its ability to grow, create jobs and deliver value and choice to Irish consumers.

And grow it has, according to a study by marketing agency Wolfgang Digital which states that as many as two-thirds of Irish online retailers are now in the “€1 million plus club” of merchants that have raked in seven-digit sums in annual revenue from ecommerce. The 2020 figure compares to 41 per cent of businesses that generated more than €1 million in online sales in 2019, Wolfgang said, and comes after a massive year for ecommerce in which it estimates Irish online retail sales grew by as much as 159 per cent. The Covid-19 pandemic saw growth in online sales last year surge to five times the average annual growth that Wolfgang had observed in similar studies from 2017 to 2019, it said in its On the Money report.

Lucy Ingram, retail analyst at Institute of Grocery Distribution (IGD), said the Irish grocery retail market was forecast to grow by 2.5 per cent from 2020-2022, which equates to a significant £1 billion in additional sales. “Since the beginning of the pandemic, online grocery shopping in Ireland has been particularly strong, more than doubling in a year,” she recently told Retail Gazette.

“We’re expecting the positive momentum gained in 2020 to continue, but growth will be slower as shoppers head back into stores,” she said. “The discount channel continues to grow, driven by Aldi and Lidl opening new stores. As we head into a period of economic uncertainty, we expect to see shoppers adopt more savvy behaviours, and the discounters to benefit from this.”

Augmented reality and delivery expectations

So, it looks like it’s a good time for Irish retail. But, after some 18 months of pandemic-adjacent chaos, what do the experts suggest retailers should do next?

Roísín Woods, E-Learning and Communications Manager at Retail Ireland, recently told RTÉ about the wonders of Augmented Reality: “In categories like beauty where the traditional try and test method or demonstrations has changed significantly in the last 18 months, augmented reality is definitely going to come more to the fore.”

“You’re seeing a lot of global retailers integrating that into their mobile or online strategy – how people can try and test products using augmented reality.”

Managing partner at the Irish and international trade consultancy, The Linkage-Partnership, John Whelan also told the Irish Examiner of the importance of delivery services: “Consumers increasingly have an array of options available at their fingertips. Although expectations of speed have increased over time, cost outweighs speed in terms of delivery features desired by consumers. The most desired delivery feature among shoppers globally is free delivery, followed by free returns. For comparison, 70% of consumers desired free delivery as opposed to 30% desiring either next-day or same-day delivery, according to Euromonitor International’s 2020 Digital Consumer Survey.”

Here to help Irish convenience retailors

We at Fitzgerald Power are constantly and consistently reinventing retail accounting solutions so you can take better control of your store’s financial performance. Being a successful independent convenience retailer in today’s world requires dynamism, innovation and decisive action. But we are encountering more and more retailers who are struggling in these areas, because their accounting solutions haven’t kept pace.

For more information on how your business can thrive in this tricky time, get in contact with our retail renegades Noel Winters and Billy Brett to discuss all things cashflow, supply chains or GAA, if you’re so inclined. 

Further Articles

What investors look for in food businesses

Five top tips on what investors look for in a food business.

Read Blog

Covid supports for hospitality sector

Over the past 18 months governments across the world have had to find novel…

Read Blog