Retailers want ‘compensation fund’ to help them compete with IKEA

In a bid to help local businesses compete or simply not lose customers to the mega IKEA complex opening in Loulé next spring, a number of ideas have been presented by the Algarve’s retailers association (ACRAL).

Most notable is the creation of a ‘Compensation Fund for Local Businesses’. It would be created with part of the money boroughs make from the taxes they charge businesses, as well as other sources such as fines.

The money would then be used to create promotional campaigns for local businesses or organise events that would pull large crowds to downtown areas.

ACRAL president Álvaro Viegas also suggested bundling local businesses under a ‘Comércio Local’ (Local Business) brand, which would emphasise the “friendly and quality” nature of smaller stores.

The launch of the brand would be “preceded by a strong marketing campaign with outdoor billboards and adverts on the radio and in newspapers as well as on social media”.

Viegas also encouraged boroughs to make it easier for elderly people who live far away from town to shop locally by providing bus trips.

The ideas were presented during a recent meeting with AMAL, the Algarve’s association of 16 municipalities. Whether the suggestions will be accepted remains to be seen.

ACRAL’s stance on IKEA has changed dramatically since new president Álvaro Viegas took charge.

His predecessor, Vítor Guerreiro, formulated the injunction that had no power to stop IKEA from starting work on its complex.

When he took charge, Viegas said that fighting IKEA was a lost battle and that retailers should look at the situation as the chance to “turn a threat into an opportunity”. (click here)

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