Surprise fall in retail sales points to continuing weakness of sector
A surprise fall in retail sales last month has cast fresh doubt on the strength of consumer spending in Ireland.
Although some stores reported a last-minute rush prior to Christmas, figures from the Central Statistics Office (CSO) showed the volume of retail sales fell by 0.1 per cent in December compared with the previous month.
The figures also indicated sales fell by 1 per cent on an annual basis in December, the largest decline in five months.
Total retail sales have now fallen by 25 per cent since the start of the recession.
When volatile motor trades are excluded, the volume of sales rose by 0.8 per cent in December compared with the previous month, resulting in an annual increase of 0.8 per cent.
Department stores benefited most from the Christmas period, recording a 6.3 per cent jump in sales, the largest month-on-month increase of any retail division.
Sales in pubs and bars also increased by 4.4 per cent compared with the previous month, while trade in books, newspapers and stationery rose by 3.4 per cent.
On the downside, there were large monthly decreases in furniture and lighting sales, which fell 7.1 per cent, and in other retail sales, which dropped 3.1 per cent in December.
The CSO also noted that car sales were down nearly 22 per cent in December compared to the same time in 2011.
The CSO’s figures do not cover the bulk of online sales, which now account for a sizeable portion of overall retail sales. Top online retailer Amazon is expected to release strong quarterly figures today on the back of a reported surge in pre-Christmas sales.
Retail Ireland, the Ibec group that represents the retail sector, welcomed the rise in retail sales, excluding motor sales, but acknowledged the recovery remained “very fragile”.
Chairman Frank Gleeson said: “After the anecdotal positive reports over Christmas, the official statistics released today are welcome. They show a large fall in car sales, but once these are factored out, sales rose slightly.”
But Mark Fielding of Isme, which represents small and medium-sized businesses, said the figures showed retail sales remain in a depressed state, despite “the over-optimistic cheerleading” from certain quarters during Christmas.
“It is obvious that the retail sector is in dire straits with retail volumes down during what should be good time at Christmas.”
Mr Fielding said the continued downturn was “as a result of shoppers curbing spending due to uncertainty, as many have suffered pay freezes or job losses”.
David Fitzsimons of Retail Excellence Ireland, however, welcomed the 1.1 per cent annual increase in the value of sales, when motor sales were excluded.
Mr Fitzsimons said his organisation was very concerned for a number of retail sectors which continue to struggle, including those reliant on a “functioning residential housing market”.