COVID-19 and BREXIT: the challenges and opportunities now facing the Irish retail sector

COVID-19 and Brexit brought a lot of challenges for Irish retailers. How can the Ireland retail sector overcome these challenges? ˑ Irish retail post-covid

Retail is a key sector for the Irish economy. The latest data shows that it accounts for EUR 30 billion in total sales and 14% of national employment.

Pre-pandemic challenges

Back at the beginning of 2020, when the pandemic started to become a reality for all of us, the retail industry, in Ireland, was already facing a series of challenges. Two of them were particularly important to the survival of small retailers and to the effectiveness of medium/large ones:

  1. An increasing shift to online shopping. This trend had become prominent since 2019, and it forced those retailers who owned only physical stores to think about solutions that would help them sell online in the future.
  2. The increasing costs of rent, rates, and insurance in Ireland. These would inevitably lead to a retail profitability challenge, meaning that while costs would continue to increase, profits would either stagnate or decrease, leading to lower operating margins over-time for Irish retailers.


Instead of cancelling the previous issues, that retailers had struggled with, it enhanced them. On top of that, it created an unprecedented situation for those who weren’t selling “essential” products.

Some of the main challenges retailers had to face in 2020:

  1. An almost 4-month total closure for the non-essential product retailers not only blocked activity, but also forced some of them to shut-down their businesses completely, with workers being either furloughed or laid-off.            
  2. This was accentuated by sales dropping down in 2020, both for in-store and online purchases. Footfall in Irish retail had fallen more than anywhere else in Europe since the pandemic due to the outlying severity of the restrictions that were imposed in Ireland. The most affected, again, were those deemed to be “non-essential” retailers.           
  3. For those who managed to keep their business going, the pandemic came with new regulations which now had to be enforced, that would put much more pressure on their staff and their supply-chains as well as leading to more costs.
  4. For the Irish retailers that had any type of commercial relation with UK – Brexit brought new regulations. More time was spent on preparing additional documentation and customs declarations. More than 70 % of retailers admitted that these new regulations came with more financial pressure for them, according to Bank of Ireland’s Economic Pulse Survey.

2021 proved to be an adaptation year for all Irish retailers. Everyone already knew what to expect, from the Government and the National Public Health Emergency Team (NPHET), if there would be any further increases in infections, hospitalisations and mortality. Most businesses had already prepared contingency plans that would help them cope in case this situation materialised.
Still, most of them had to constantly think of and rethink ways to reduce costs, increase sales and maximise profits in order to cover for the pandemic losses which were constantly accruing due to the seemingly never-ending restrictions.

  1.  Online sales registered an increase. Data shows a constant increase of e-commerce transactions on credit and debit card. The pre-pandemic trend was here to stay.
Monthly e-commerce transactions on credit and debit cards, Ireland, 2020-2021, source:

2. The prevalence of online shopping, as well as the uncertainty related to a possible new lockdown, determined that retailers made a shift of focus even more towards e-commerce. More options being made available online meant an increasing and fierce competition for businesses. Now retailers needed to find solutions to stay ahead of the competition.    

3. The retailers, who worked closely with the UK, found, or are still looking for ways to adapt. Some of them have shifted their attention to local or other European suppliers for their sourcing needs, while others have just got used to the new processes in place following Britain’s exit from the European Union.       

4. Ultimately, all of these changes, during the Pandemic, came at a cost for the retailers, added on top of their already increasing costs. 2021’s emerging energy crisis didn’t help, considering the high prices of electricity and gas etc. 

5. Global supply and labour shortages are badly affecting the world’s supply-chains. Some orders are being seriously delayed, creating more pressure on retailers and more time being spent trying to monitor and deliver orders.

2022 – what’s next for the Irish retailers?

Irish retailers need to focus on the following in 2022:

  1. E-commerce is getting stronger and stronger so focusing on online sales will remain a priority for 2022. The question is how to make sure that your business is more visible than those of your competitors. In other words, how you might secure new and returning customers. Implementing both digital marketing and customer engagement strategies, in parallel with offering quality across the entire customer buying experience, will have a positive impact on sales.
  2. Working with the UK means that the most important questions will be how to maximise sales and reduce costs in order to minimise the financial challenges. Will increasing the end price of the products help in getting more customers or will it decrease the volume of sales? If it is difficult to find a cost-effective strategy, then finding new markets for selling or getting materials from may be a better solution.
  3. The profitability challenge  means that retailers must keep a closer eye on their budgets and navigate through all of the current financial volatility. Ideally, decreasing fixed costs and turning them into external variable costs can help in minimising financial risks and uncertainty. This is not an easy task, considering the high cost for renting, insurance, and salaries in Ireland.

XTENSOS solutions for Irish retailers

At XTENSOS, we help retailers to access and manage cost-effective customer service teams. In this way, some fixed-costs can be turned into variable costs, without making any compromises on quality or service. Our cost-effective services-centre is in Cluj-Napoca, Romania.

This bustling city is internationally known for having a huge pool of available multilingual talent. The number of advanced English speakers is impressive by international standards, and you can access a variety of advanced European language speakers (French, Italian, German, Spanish, Nordic, and Slavic languages). The city is also very Western service-oriented, sharing the same business values as most Western countries such as the UK, Ireland, and the USA.

We have proved that companies can, in this way, focus their actions and budgets on other activities that will help to increase sales and customer retention. Through our customer-service teams, we also bring our experience in terms of customer engagement as we have more than 30 years of experience in building global services companies with a particularly strong background in Quality, Recruitment and Human Resource Management.

There are other supporting services we can offer for retail companies that want to review their growth strategy and establish a future direction. Our Translation services allow Retailers to get their message across in local languages. Our Business-Consulting services help companies improve their short, medium and long-term performance and we also have a Customer-Service training programme which is focused primarily on improving the interaction between your staff and your customers.

If you would like to share your recent retail challenges, then please get in touch with us and we will be happy to help.


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