Bars still generating revenue despite lockdown, but from what?

CSO retail data show bar sales plunged 75% in January

A group of friends toasting in a pub, holding their glasses high above the table. Lockdown restrictions have left Irish bar owners with little to cheer about, although they are still generating some income, as noted by latest data from the CSO.

A group of friends toasting in a pub, holding their glasses high above the table. Lockdown restrictions have left Irish bar owners with little to cheer about, although they are still generating some income, as noted by latest data from the CSO.

 

Bar sales in January took the biggest hit of any retail sector, plunging 75 per cent month on month, according to the latest retail sales data from the Central Stastics Office (CSO). But with every bar in the country shut, why weren’t sales 100 per cent down?

The explanation is that some bar businesses also operate off-licences and are therefore still generating revenue. Their off-licence sales are not classified under the CSO’s “food, beverage & tobacco” division like traditional off-licence sales. The CSO believes it would be too onerous to ask these businesses to split out their revenue streams so their off-licence sales fall into the bar sales category. Some premises are also serving takeaway pints. Both of these elements give us bar sales even when the pubs are closed.

Overall, retail sales were down nearly 22 per cent in January, which is severe, but less severe than the 35.7 per cent contraction seen in April last year even though both lockdowns have many common restrictions.

Accelerated digitalisation

The explanation is two-fold. More businesses have been able to go online this time around. Last April, many small businesses were caught on the hop and didn’t have the necessary platform in place. The pandemic has accelerated digitalisation in several areas.

Another explanation is that a greater percentage of essential retailers – hardware stores, for example, which are allowed to trade, weren’t fitted out to deal with the Covid-19 social-distancing protocols the first time around. In other words, they hadn’t Covid-proofed their premises and were forced to close. More of these establishments were able to stay open this time.

The CSO figures also show that the proportion of retail sales transacted online increased to 10.9 per cent in January, up from 5.8 per cent in December. But this metric only accounts for the level of online sales generated by Irish-registered companies. Most of sales generated through Amazon are with foreign-based retailers and therefore the true level of online sales is likely to be much higher.