Retail sales falter on weak demand
Retail sales declined in June as consumers reined in spending on food, drink and tobacco.
New figures released by the Central Statistics Office this morning show that the volume of retail sales contracted by 5.5 per cent when compared with June 2011. This represented the biggest annual fall since December 2009.
When motor trades were excluded, core retail sales were found to have fallen by 1.7 per cent year-on-year.
Sales of food, beverage and tobacco underwent the sharpest decline, with volumes decreasing by almost 10 per cent when compared with May of this year. Sales of hardware, paints and glass were almost 5 per cent lower.
However electrical goods saw a monthly increase of about 3 per cent, while books, newspapers and stationary rose 2.6 per cent.
Alan McQuaid, economist at Merrion Stockbrokers, described the figures as very disappointing and said it was hard to foresee a major rise in spending in the coming months, given the current uncertain climate.
“The bottom line is that consumers remain under immense pressure, with stealth taxes announced in the December Budget further set to eat into disposable income,” Mr McQuaid said.
“Lower interest rates will ease the pain to some degree but not enough to put spending back in the black. Stronger sterling too may discourage consumers going up to Northern Ireland to do their shopping.”
However he predicted that personal spending on goods and services will fall 2 per cent in real terms this year.