Retail sales down 1.9% in year to February

RETAIL SALES continued to fall last month, down 1.9 per cent in the year to February, new data from the Central Statistics Office shows.

The decline came as consumers cut back across a range of areas, with sales in books and fuel falling and furniture sales also shrinking.

Department stores felt the pinch as sales volume dropped by 5.6 per cent annually, despite an 8.5 per cent rise compared with January.

Sales volume was down 0.3 per cent from January, with bar sales down 3.3 per cent, books and newspapers falling by 3.2 per cent, and the motor trade down 2.9 per cent. This was partly offset by a 6.3 per cent rise in the volume of electrical goods sales.

Excluding the volatile motor trade, core retail sales were down 2.1 per cent over the year and 1 per cent on a monthly basis.

The value of retail sales was down marginally over the month, falling by 0.1 per cent in February, and was 1.8 per cent lower over the year. Excluding the motor sector, the value of sales was 1 per cent lower over the month and fell by 1.7 per cent over the year.

Davy’s chief economist Conall Mac Coille said the decline was not unexpected. “We interpreted the strength of retail sales in Q4 as a temporary phase associated with the rise in VAT,” he said, “so today’s poor retail sales data are not a surprise, consistent with the Davy forecast that Irish consumer spending will contract by 1.7 per cent in 2012.”

Irish Business and Employers Confederation (Ibec) group Retail Ireland has called for the Government to re-examine the decision on VAT if the downward trend continues.

Last week, the company behind Currys and PC World, DSG Retail Ireland, reported an annual loss of €5 million as revenues from electronics sales continued to slide.

There have been several main street casualties. Waterstones closed its Irish stores last year. This week, retailer Game closed all its stores in the Republic after it was placed in administration.

Bloxham chief economist Alan McQuaid said: “Overall, there is little to be optimistic about as regards the Irish consumer or personal spending in the immediate future.” He said Retail Excellence Ireland had called on the Government to cut local authority rates to help struggling retailers, and warned of further risks ahead.

“The outlook is mixed, with many retailers concerned that the upcoming fiscal compact referendum will further undermine sentiment over the coming months,” chief executive David Fitzsimons said. “However, a number of positives exist, including the possible further reduction in the ECB rate, the current spell of good weather and the summer’s major sporting events.”

Small business group Isme said retailers were also fighting the black economy and called for stronger action from the Government to stamp out rogue traders.

The Dublin City Business Improvement District said it had evidence to suggest the city centre was beginning to show signs of a recovery in consumer confidence. Representing 2,500 businesses, it said the area was recording consistent footfall growth for the first time since 2006.