Monthly sales up slightly but yearly figures show 1.5% fall
THE VOLUME of retail sales rose by 0.7 per cent last month, reversing a downward trend in June, as hardware, fuel and textile businesses recorded a modest increase in trade.
The latest Central Statistics Office showed retail sales continued to fall on an annual basis, however, declining by 1.5 per cent year-on-year.
Separately, the latest KBC Ireland/ESRI consumer sentiment survey showed a marked improvement in sentiment for August as pessimistic views about the economy abated.
The index rose to 70 this month, up from 67.7 in July, reaching its highest level in nearly five years. Seven months out of the last eight have now increased recorded increases in sentiment.
The overall index has two parts – an index of consumer expectation, which looks at consumers outlook for the next year, and an index that focuses on the current situation.
The notable feature of the 2012 survey is a clear easing in the number of consumers who feel things are set to get even worse, according to KBC chief economist Austin Hughes.
In August 2011, some 59 per cent of consumers felt the economy would weaken further in the following 12 months. That proportion has now fallen to 34 per cent.
“We continue to believe that the improvement in sentiment is primarily driven by an easing in fears rather than by a radically more positive view of either the outlook for the Irish economy or consumers’ own finances,” Mr Hughes said.
The Central Statistics Office figures, published yesterday, showed the volume of retail sales, excluding the volatile motor trade, increased by 1.1 per cent in July compared with the previous month, while there was an annual decrease of 0.5 per cent.
The sectors with the largest monthly volume increase were clothing, footwear and textiles (+5 per cent); hardware, paints and glass (+4.5 per cent); and fuel (+3.8 per cent).
A monthly decrease was seen in electrical goods (-1.9 per cent); bar trade (-1.7 per cent) as well as books, newspapers and stationery (-0.9 per cent).
The figures showed the value of retail sales rose by 0.9 per cent in July following a drop of 1.5 per cent in June. This was the first monthly rise in the value of retail sales sine March. However, the annual change remained in the negative at -1.6 per cent.
Retail Excellence Ireland chief executive David Fitzsimons welcomed the increase in sales but warned that the industry “continues to be in a state of great distress”. He said budget speculation was killing consumer sentiment.
“We would ask the Government and media to refrain from any budget commentary until it is necessary to do so,” Mr Fitzsimons added.
The Irish Small and Medium Enterprises Association said the lack of consumer confidence was crippling the retail sector.
Isme chief executive Mark Fielding said: “The retail industry, with excess capacity, reduced consumer spend and rising Government-influenced costs has been attempting to adjust its cost base in the changed economic conditions.
“However,” Mr Fielding added, “the biggest costs to retailers, such as inequitable commercial rates, unrealistic rents and uncompetitive labour costs have remained stubbornly high.
“These costs, together with recent transport fuel increases continue to make life hell for SME retailers, who, due to pathetic Government inaction, will result in more closures and job loses.”