Consumers set to spend almost €4bn over Christmas
Retail Ireland report shows sales up 1.5%, with rising employment driving spending
Maura, Fiona and Sean McHugh from Dublin on Henry Street last Friday. Prices are at their lowest since 2002. Photograph: Nick Bradshaw
Irish shops are bracing themselves for their best Christmas since the nadir of the economic collapse, with a new report suggesting consumers are set to spend €4 billion between now and the new year.
The upbeat forecast is contained in Retail Ireland’s Christmas Monitor, which tracks key trends across the economy and the retail sector to give an insight into how they are likely affect the crucial Christmas trading period.
The monitor shows that €3.96 billion is likely to be spent in shops this December, up from €3.88 billion last year, with Irish households set to spend between €650 and €750 more in shops this month, than other months of the year.
The monitor, from Ibec’s retail division, shows that sales in the first nine months of this year are up 1.5 per cent in value terms on the same period last year and it pointed to rising employment as a key driver of greater spending.
Retail Ireland’s most recent forecasts said there would be about 35,000 more people at work since last Christmas and almost 96,000 more than there were in Christmas 2012.
Disposable income has continued to climb. It increased by 3.3 per cent in 2013 and Retail Ireland said it expected it to grow by a similar percentage this year after significant falls between 2008 and 2012.
Consumer sentiment is at its highest since 2007, with the annualised average of the ESRI/KBC consumer sentiment index 30 per cent higher than in 2013 and 70 per cent higher than in 2008 and 2009.
Retail Ireland said competition remained intense across the retail sector and it anticipated that prices would be kept down. At present, goods inflation is at minus 2 per cent annually as shops battle for footfall.
Sales periodGoods prices this December are on course to be at their lowest level since December 2002, with downward pressure expected to continue into the post-Christmas sales period.
“The Irish retail sector has had some very tough years, but there is now cause for cautious optimism,” said Retail Ireland director Thomas Burke.
“Key indicators are pointing in the right direction. More people are at work, disposable income is rising and the Irish consumer is more positive about the future.
“This should translate into a really strong Christmas period for the sector. This is good news for the economy; it means more jobs and more tax revenue.”
However, he warned that retailers were still paying “unsustainably high rents” and called on the Government to back Senator Feargal Quinn’s Bill on upward-only rent reviews.