Monthly retail sales fall but annual trend stays positive
Monthly sales figures drop 1.5 per cent as cars, electrical goods and food sectors take a hit
February’s retail sales grew year on year but fell compared with the previous month. Photograph: Aidan Crawley/Bloomberg
Retail sales fell by 1.5 per cent last month - the second-largest monthly decline in over a year - as sales of cars and electrical goods declined.
The latest figures from the Central Statistics Office (CSO) - which follow a 1.9 per cent rise in January - suggest recovery on the high street is far from assured.
Several analysts, however, insisted the underlying trend for the sector remained positive, with sales up by 5 per cent on an annual basis.
When volatile motor sales are stripped out, the data showed retail sales fell by 0.4 per cent last month but were up 2.3 per cent on an annual basis.
The sectors with the largest monthly decreases were motor trades which saw sales drop by 5.7 per cent, and electrical goods which were down 2 per cent.
Sales of food, beverages and tobacco were also down by 1.9 per cent.
On the upside, sales of clothing, footwear and textiles rose by 3.5 per cent while fuel was up 1.4 per cent last month.
Commenting on the figures, Davy economist David McNamara said the monthly drop in volumes was primarily due to the dip in motor trades from “the enormous” annual growth rate of 29 per cent in January to 14.8 per cent in February.
“Encouragingly, consumers are now spending on bigger ticket items such as cars - pointing to more confidence in their spending power this year - but this appears, as yet, to be the expense of other discretionary purchases. The impact on consumer spending is unclear at this point,” he said.
Mark Fielding, chief executive of the Irish Small and Medium Enterprises Association, said the slow pick-up in sales was still a cause for concern.
“Retailers were the first to be hit by the effects of the economic crash and are last to experience any benefits of the slight up-turn. Consumer spending is increasing but slowly and high business costs make profitability a difficult aspiration for many,” he said.
Goodbody economist Juliet Tennent described the figures as disappointing, noting the annual increase had dropped from 9.4 per cent in January to 5 per cent in February.
She said “widespread discounting” was in evidence across the sector and this appeared to be having a positive impact on volumes.
“The categories showing the biggest price declines are also those that are showing the strongest volume growth,” she said.