Retail activity slowed significantly in February as consumers displayed an increasing unwillingness to spend, according to new data from the Central Statistics Office (CSO).
The figures show that the value of retail sales dropped by 1.6 per cent in January-February, indicating a fall-off in consumer demand in the wake of winter-sale discounting.
When the effect of pricing is ignored, the drop in sales volume extends to 2.7 per cent.
On an annual basis, February retail sales were 2 per cent ahead of the same month of 2002 in value terms, but 2 per cent lower in volume, according to the data. On both measures, annual retail sales growth was at its weakest point in more than four years.
The CSO points out, however, that when the motor trade is excluded, sales volume rose by a slightly more buoyant 1.7 per cent on an annual basis, while the value of sales grew by 5.4 per cent.
A spokesman for the Society of the Irish Motor Industry (SIMI) said the divergence between motor and other trades was attributable to the base effect created by a surge in car sales in February 2002 as buyers sought to pre-empt the March imposition of a higher VAT rate. The spokesman said sales in the motor market were running about 2 per cent behind last year.
Economists at Davy Stockbrokers said the overall sales figures supported their view that growth in retail sales and consumer demand was slowing. Davy estimates suggest consumer demand grew by 2 per cent last year and is set for slower growth in 2003.
The broker noted however that while such growth would signal a slowdown in Irish terms, it would still be stronger than the demand experienced in many other economies.
Employers' body IBEC said the numbers indicated weak demand and illustrated "a continuing low level of consumer spending".
Three-month figures show that the volume of sales in November- January was flat on the preceding three months. A detailed breakdown of this data shows that while January sales stimulated demand in clothing and footwear, other sales remained sluggish.
