Words of caution about retail sales figures

Headline retail sales figures for January received a positive welcome when they were released last month, with several commentators interpreting the 3.3 per cent month-on-month jump in sales volumes as further evidence that consumer spending will stage a solid recovery over 2015 as a whole.

However, one voice sounded a more circumspect note and that was Retail Excellence Ireland (REI), which pointed out that while the trend was positive, aggressive price discounting by retailers drove the growth in volumes.

As the CSO prepares to release February retail sales numbers at the end of this week, REI deputy chief executive Sean Murphy warned against complacency when interpreting key economic data.

He believes there is a creeping trend of "reverse provincialism" – mistaking improvements within the M50 for evidence of a broad-based stabilisation around the country.

While he says there is no doubt that Ireland is in a better place than it was six or seven years ago, he believes talk of “the good times rolling again” is jumping the gun as large swaths of the country are not seeing significant improvements in economic activity.

“Last month’s figures [for January] weren’t as hot as people were saying. Let the facts speak for themselves.”

He suggested that some economic commentators need to travel round the country to see the reality on the ground instead of assuming that the situation in Dublin reflects the state of the wider economy.

In terms of the data due out this week, it may well indicate a lull in spending activity as consumers’ Christmas splurging and credit card bills catch up with them, with the result that February tends to be a dreary month for retailers.