Retailers need commercial rates reform far more than an ecommerce fund

The State has launched a fresh call for applications for a €1.25 million pot of funding for retailers who need help migrating their business online.

The fund will give cash grants of up to €25,000 to pay for training, advice or research for retailers looking to chart a way forward in the ecommerce age.

The payments will, of course, be much appreciated by those get them. Every little helps if you’re a small retailer trying to survive in an online world dominated by corporate gorillas such as Amazon.

But in terms of the help that bricks-and-mortar retailers need from the State, it is but a drop in the ocean. What they really need is an overhaul of the penal commercial property rates system that puts them at an immediate disadvantage compared to the digital operators.

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This is the second such call for applications for the fund, which is overseen by Enterprise Ireland, the State agency charged with nurturing Irish exporters. To qualify for the first round, retailers had to have a minimum of 20 staff.

It has been cut to a minimum 10 staff for the second round, although it makes little sense to have any cut-off point at all. The smaller the retailer, the more likely they are to need the assistance.

Epicurean goods

Niche micro-retailers also tend to sell the sort of wares that are likely to be most attractive to consumers based overseas, such as Irish epicurean goods.

A major challenge, however, for traditional retailers migrating online is that they must maintain two cost bases: the normal, everyday costs associated with operating a physical shop, such as rates; and the IT costs associated with selling online.

Pure digital players, who might not even have a warehouse in the State, do not face the same issue, and it gives them a huge competitive advantage.

Why can’t the Government fund reductions in the local authority-led commercial rates system, with the gap made up by extra taxes paid by online retailers?