Longford retailer receives massive €32,000 energy bill and warns jobs are being put at risk

The energy crisis burrowing into the finances of every home across the country is creating a “vicious circle” that may result in wage cuts and job losses.

That was the bleak outlook one Longford retailer predicted if the cost of energy does not reduce in the foreseeable future.

Oil and gas markets tightened in 2021 as the rapid economic rebound following the pandemic saw the supply-demand dynamic reverse. The increases in energy prices leaped again in February of this year as Russian sanctions, imposed in response to the war in Ukraine, further impinged on the supply of gas and oil.

Rising fuel costs have multiple impacts on families, households and businesses across the country. Budget 2023 was drafted to create an “all-of-government” package to address rising energy bills.

That budget saw enhanced electricity credit of €600 to be applied to electricity bills, €200 before Christmas and the remainder (in two tranches) early in the New Year.

Businesses were also supported. Under the Temporary Business Energy Support Scheme (TBESS) a refund of 40% of the increase in their gas and electricity bills since September 1 will be made by the Revenue Commissioners, as long as they have experienced a 50% increase in their unit price since last year. However there is a cap on that support.

The plight of one local retailer has highlighted the limitations of this support. The problems experienced by Davis SuperValu were raised in the Dáil by Deputy Joe Flaherty (FF). The TD highlighted the impact of the global energy crisis on the local business.

Longford man 'needed three brain surgeries' following 'cowardly assault for entertainment'

Midlands man 'violently assaulted and died as a result of his injuries'

“Their energy bill has gone from €10,000 per month to €32,000 per month in the past year – an increase of 220%,” Deputy Flaherty told the Dáil chamber, “Even when we take into account the TBESS, their bills will still be €14,000 per month higher than they were last year. It's an incredible additional cost to have to carry.”

Bringing the staggering increase to public attention serves an important purpose: “That's why I raised the issue with Deputy Flaherty,” Roy Davis (pictured) told the Leader, “it's easy to talk vaguely about 'an energy crisis', but when you see the numbers involved it brings home how this affects business.”

The retailer finds himself in a difficult situation: “Most products have seen price increases from source. You can't then arbitrarily add on additional costs onto prices that have risen to offset the additional costs you are experiencing.”

“In the back of your head you are hoping it will be short term, but I don't know how short it's going to be. The government is playing that game as well. They're hedging their bets, hoping it will be short term,” Roy said.

He is conscious that there is always a payback on any State assistance: “Every support given by the government has to be paid back by somebody. Whoever is working, paying taxes; they will be paying it back. That's on top of the support given during the Covid pandemic.”

Minimising costs has become a priority: “You can't turn the lights off. You can reduce the lighting, but that creates a bad visual impression. With LED lighting it is not the most expensive form or energy use. Refrigeration, ovens, cooling and heating are the largest consumers of energy.

“You can reduce the amount of refrigeration, but then you reduce your sales. It's a double edged sword,” he tells.

€5.8m for Longford rural development and enterprise projects over next five years

Longford Sports Partnership allocated €168,750 in Dormant Accounts Funding

During Covid the supermarket's online presence increased. The rising cost of fuel has hit transport costs, which in turn affects this area of the business: “We don't make any money out of online sales at the moment. The cost of vans on the road is astronomical.

“First we will look at the low hanging fruit; things like delivery vans. If we are eliminating costs then we will have to consider taking them off. We would keep the click and collect, they don't have the van costs, driver costs, fuel cost attached.”

Such determinations don't come easy: “The more critical it becomes the more critically we will have to look at your costs. We will just have to pare things back. We will face some very difficult decisions.

“We have taken all the easy decisions. Switched the fridges to more efficient units, changed their doors, recovered heat to heat water, changed all lights to LEDs.

The next cost cutting measures will be harder: “Some shops have talked about cutting hours. It does reduce some costs, heating and wages for example, but it's not what you want to do. It's something that will have to be considered the more prolonged this problem is.”

Roy says the dramatic hike in his costs are not even the most severe: “There are shops bigger than ours whose bills are higher. They will feel the pinch more than us, huge users are the ones that need the greater support.”

The supermarket owner made a grim prediction if the cost of energy does not reduce: “It will eventually come down to making difficult choices, can we do with less staff? Can we do it with shorter hours? That's going to affect wage packets, and it becomes a vicious circle.”