I thank the committee for the invitation to come here today. I am proud to say I am an independent trader. Anybody who knows me will have heard me state that retail is not a job or career; it is vocation. It is something that I would not recommend my children to get involved in, but many who run their own business would discuss it.
We are responsible for our business seven days a week, 365 days a year. This year I will earn less than the minimum wage as the business owner. My store manager gets paid more than I do.
My store is located in a business park. Last year I won four of the five national industry trade awards. We are known to be one of the best convenience stores in the market.
I am very proud of my staff. To me, they are not just staff or numbers on a payslip. They have become colleagues and friends, and have seen my business develop to what it is today, which is, or certainly has been, a successful business.
In the current market with the downturn that is in place, certainly I must make very difficult decisions and on the last JLC increase, it was a simple one. As an employer, I was forced to increase wages and to let somebody go. It was very simple. Therefore, that problem became somebody else's problem. On the next increase that comes up, if business remains at the same level it means simply that I will have to let somebody else go. There are no grants for retailers to retain people within the industry.
Our industry offers a significant opportunity to people like myself. I started off as a trolley boy in my local SuperValu in 1987, became a trainee manager, became store manager, went to college and became a graduate, and am proud to say I have run a store for the past number of years. Certainly, the effort I put in justifies the rewards I got out, which are not financial. Unfortunately, Bank of Ireland will not accept awards as lodgement slips. If it did so, I would have a very good bank balance.
The reality is that business in our industry is down between 15% and 22% to 23%. There are three main costs within our industry — I can only speak about my own business. My first cost is my financial cost — my commitment to the banks, institutions and to the brand of Spar. My second cost is my general day-to-day operational cost. With my team and staff, I have been absolutely committed, and proactive rather than reactive, in reducing my costs on a day-to-day basis, whether that is a cheaper spoon or napkin, and doing all this without reducing the quality of the product and, more importantly, the consumer offering. One must remember that Ireland, within the Spar world, is considered the best in innovation and quality. We have won virtually ever global award over the past couple of years and I am proud to say I have been involved in that.
My third, and most significant, cost is my wage cost. Simply, my wage cost, because of the reduction in turnover, now equates to between 13.5% and 15% of my business. There is massive pressure on me due to margin erosion because of the current climate in which we live. We also must accept breakfast-roll man is dead and gone, and will not be back. The luxury cups of coffee are not being purchased and the €5 sandwiches are not being bought. The margin on those type of products, which were the profit contributors to our bottom line, is not there. Not alone are we suffering from sales, there is margin erosion. Retailers are willing honestly to pass on the savings to our valued consumers where we get it, and we are getting it and passing it on.
The wage costs, however, as Mr. Mannion correctly stated, are out of our control. Beside my store there is a coffee shop, which is currently going through its own difficulties and which is paying its staff €1.20 to €1.50 an hour less than I am legally obliged to pay. How can I compete against that store because those are costs?
I would be proud to say that I spend thousands of euro a year on staff innovation and training because the best investment I can make within my business is in my staff. I do not want to let them go. I do not want to add them to the end of the queue that is not too far from me waiting outside in the rain for the dole, but every time we are legally obliged to take these increases I must let somebody go.
We are looking at our costs. Anybody who is still in business has had to look at costs and reduce them. Deputy Morgan referred to the 34 employees in his business at home. Mr. Mannion correctly stated that €1,000 off the cost of the accountant is certainly welcome, but it does not add to the bottom line in the current market.
Rates are killing us as retailers. They are absolutely outrageous. I am paying 50% more in rates than businesses across the canal from where I am located because I am considered to be in a different area. That difference would almost pay for a good driver. It has nothing to do with the type of area, and the type and nature of serving five and a half days a week. It is not a level playing pitch.
In the trade, one sees continued marketing by energy companies about great cost reductions. I challenge anybody to try to get that delivered into their business. I am waiting two and a half months to get my energy bill down. I cannot get that.
I challenge anybody within the trade to come in and run a more cost-efficient business than I am running at present. It is quite difficult to say, but considering the type of business I operate which is recognised within the industry, I feel strongly enough to come here and say that I would pay somebody else to make those sandwiches. However, I am quite happy to do so to express how difficult it is becoming for us.
If changes are not made, we as business owners within the trade will have to change our business. We accept that, and we are doing that every day, but there are so many issues outside our control that we cannot deliver. If we cannot deliver it, something must go.
If one travels along main streets, such as Grafton Street, where one will find 15 closed units. One should go into any county, any constituency or any area and look at the significant amount of closed stores. That will continue. It is not due to lack of commitment, bad locations, bad decisions, the banking crisis or anything like that. It is down to the fact that we cannot make our sites viable because of the cost structure in which we operate.