Retail activity softens as Brexit uncertainty weighs on consumers

Retail Ireland’s quarterly monitor suggests consumers are concerned about likely impact

Irish consumer sentiment slumped to a near five-year low in July amid signs the United Kingdom may crash out of the European Union without a deal. Photograph: Alan Betson

Irish consumer sentiment slumped to a near five-year low in July amid signs the United Kingdom may crash out of the European Union without a deal. Photograph: Alan Betson

 

Retail activity has softened in recent months as consumers consider how Brexit might impact their personal finances, according to Retail Ireland, the Ibec group that represents the sector.

In its latest quarterly monitor, the group said the value of sales in supermarkets and convenience stores rose by 2.4 per cent in the second quarter while sales volumes grew by 4.1 per cent, demonstrating steady, if unspectacular growth.

“After a brief respite during late spring and early summer from almost saturation levels of Brexit coverage in the first quarter of the year, we are now again entering into a further period of intense Brexit debate ahead of the October 31st deadline,” Retail Ireland director Thomas Burke said.

“The trajectory of consumer sentiment has matched this public concern with an initial recovery over the late spring and summer period now subsiding as consumers begin to reflect once more on how Brexit might impact their personal finances,” he said.

Concern

“This has led to a softening in sales and is a cause for concern as the sector looks toward its busiest period of the year,” he said.

Irish consumer sentiment slumped to a near five-year low in July amid signs the United Kingdom may crash out of the European Union without a deal.

Looking ahead, Mr Burke said: “The type of Brexit we experience will likely shape our ambitions for growth in the sector for the remainder of 2019 and 2020.”

Outside of Brexit, the group’s quarterly report highlighted the unseasonal weather as one of the main factors dampening sales.

The report said the relatively wet and cool summer weather was in stark contrast to the summer of 2018 when Ireland experienced hot and balmy conditions.

Supermarkets and convenience stores, considered a key barometer of overall economic activity, reported strong value and volume growth for the six months to June 2019 over the same period last year.

However, month on month the sector is showing a fall between May and June 2019, and between June 2019 and June 2018, it said.