There was a mixed reaction from retailers and their representative organisations to Budget 2027.
RGDATA argued that the Budget Statement was the first formal indication employers received that the National Minimum Wage would increase by an amount far in excess of inflation.
“Thousands of independent shop owners around the country will be deeply disappointed by Budget 2027,” said Roseanne Regan, RGDATA’s new Director General. “The highest business cost increase they have been dealing with – the cost of employment – will go up again as a result of the increase in the National Minimum Wage by an amount in excess of inflation.”
She argued that for an employer with a full-time employee working 39 hours on the minimum wage, the increase will add approximately €1,750 a year in wages and employer PRSI: “Multiply that across a workforce and the impact is significant. Where does Government expect these businesses to find this extra money?”
RGDATA also criticised the absence of meaningful measures to address rising electricity costs, which are a significant overhead for independent grocery and convenience shops. “On the evidence of Budget 2027, Government has not demonstrated any real intent to reduce the overall cost of doing business. On the contrary, independent local shops are being left to foot the bill for another year of rising costs,” Regan argued.
Retail Ireland welcomed measures in Budget 2027 that will support household incomes, consumer spending and workforce skills, but warned that the increase in the National Minimum Wage will add significant costs to a sector already facing acute cost pressures.
“Measures that put more money into consumers’ pockets are welcome and will help support spending across the economy,” noted Arnold Dillon, Director, Retail Ireland. “However, today’s increase in the National Minimum Wage adds further cost pressure to a sector that is already operating under considerable strain. Retailers are dealing with sustained increases in labour, energy, logistics and regulatory costs while competing in a market where consumers remain highly price conscious.”
Retail Ireland welcomed the Budget’s focus on supporting disposable incomes through personal tax measures, as well as investment in skills, training and AI readiness through the National Training Fund and wider workforce development initiatives. These measures will help support consumer demand and improve the long-term competitiveness of the economy. However, rising business costs remain the key concern for retailers across the country. The increase in the employer PRSI threshold will provide some offset to the minimum wage increase, but it is not sufficient to address the cumulative cost burden facing retailers.
“Retailers are committed to providing quality employment and investing in their people, but there is a limit to the costs businesses can absorb,” Dillon continued. “For many retailers, particularly smaller businesses, margins are under severe pressure and every additional cost has consequences for investment, expansion and job creation. While businesses are committed to supporting their employees, the cumulative impact of rising employment costs is becoming increasingly difficult to absorb, particularly for smaller retailers operating on tight margins.”
Retail Ireland also welcomed measures aimed at simplifying administrative requirements for employers and acknowledged the continued focus on public safety, skills development and town centre investment, all of which are important to maintaining vibrant retail communities across the country.
Food Drink Ireland, the Ibec group representing the food and drink sector, has welcomed measures announced in the Budget including the new €1 billion Scaling Fund to support Irish SMEs to scale and grow and improvements to the R&D tax credit. These measures will help to boost investment in the sector and improve its competitiveness.
However, Linda Stuart-Trainor, Deputy Director of FDI, said that significant input cost inflation in energy, transport, raw materials and labour continues to challenge the sector. It is critical that Government focus on reducing the cost of doing business by minimising Government imposed charges and overregulation.
Retailers Against Smuggling contend that the €1 excise hike on tobacco will drive more consumers to the black market, while Responsible Vaping Ireland (RVI), argue that the 20c per ml increase in E-Liquid Products Tax announced in Budget 2027 will add further pressure to businesses already facing spiralling operating costs.
“Vaping products are an important part of the business for many independent and rural retailers,” noted an RVI spokesperson. “These are people who are playing by the rules, ensuring age checks, selling safe, regulated products and doing everything they can to operate responsibly. They should not be the ones punished while rogue sellers continue to operate outside the rules.
“Government needs to understand that every extra cost makes it harder for legitimate retailers to compete with illegal sellers. If you make regulated products more expensive while failing to properly enforce the rules against rogue operators, you risk pushing more consumers towards a ballooning illegal vape market.”
