Cars, bars and home decor drive recovery in retail

Retail sales jumped 11.6 per cent in July, the largest monthly rise in 10 years, as new car sales benefitted from the introduction of 152 number plates and consumers spent more in bars and on home decor.

The latest figures from the Central Statistics Office (CSO) indicate retail sales have risen by 9.9 per cent year-on-year.

When motor trades are excluded, the monthly rise was 0.6 per cent and 6.6 per cent on an annual basis.

The sector with the largest monthly increases was motor trades, which saw sales rise 22.9 per cent. New car sales peak due to the dual registration system, which saw the 152 number plates from July 1st.

However, there were also increases in sales of furniture and lighting (+6.7 per cent) and bars (+4.4 per cent).

The sectors with the largest monthly decreases were hardware, paints and glass (-3.5 per cent), books, newspapers and stationery (-2.4 per cent) and food, beverages and tobacco (-1.4 per cent).

On an annual basis, sale in most of the 13 business sectors covered by the survey grew, with car sales (+18.9 per cent), furniture and lighting (+13.8 per cent), and electrical goods (+14.4 per cent) leading the charge.

Only food and beverages recorded a year-on-year decline, falling by 2 per cent.

“Following on from the positive employment and earnings trends, it is little surprise the Irish consumer spending recovery is continuing,” Goodbody economist Dermot O’Leary said.

Noting the jump in car sales, he said the growth in big ticket items was a confirmation of the improvement in consumer confidence and belief about the sustainability of the recovery in the labour market.

He also said the renewed buoyancy in bar sales was “a sign that discretionary spending is also on the up”.

Isme, the Irish Small and Medium Enterprises Association, acknowledged the figures reflected a broad-based recovery.

However, chief executive Mark Fielding said the continuing pressure on margins and the increase in business costs were crippling the sector.

“Irish consumers are holding back a certain amount of spend. However, they are willing to buy when they can see value. Unfortunately for our retailers, that means more sales at higher costs leading to lower profit margins”.

“The Budget could rectify this through a reduction in the tax burden for consumers and a reinstatement of the 4.25 per cent employer’s PRSI”.