Heatwave brings joy to some retailers but chill wind to others

Not every type of shop basked in June sunshine, says Retail Ireland

Consumers abandon department stores, furniture shops, cinemas and hairdressers for the beach. Photograph: iStock

Consumers abandon department stores, furniture shops, cinemas and hairdressers for the beach. Photograph: iStock

 

Retail sales grew 3.4 per cent in the second quarter as demand rose for barbecues, garden furniture and ice-cream, but hot weather also put people off shopping, the latest report by Retail Ireland has found.

The advent of the heatwave in June was “a good news story” for certain retail categories, such as grocery, DIY and hardware, it said. But, for some retailers, it led to a decline in footfall as consumers headed to the park or the beach rather than the shops.

Supermarkets and convenience stores were among the winners, with the volume of sales up 5.5 per cent in the second quarter compared to the same period in 2017, as good weather boosted the purchase of treats and “little and often” shopping.

The Fifa World Cup, while not as lucrative as it might have been if Ireland had qualified, also contributed to strong sales of alcohol, soft drinks and party food sales in June, said Retail Ireland, a group affiliated to employers’ body Ibec.

DIY and hardware stores, which saw sales volumes rocket 10.2 per cent year-on-year in the second quarter, benefited from strong demand for gardening products, outdoor furniture and barbecue products, while car wash sales also showed high year-on-year increases.

Weather divide

Retail Ireland said it was a “solid” quarter for Irish pharmacies, with the weather driving strong demand for hay fever treatments and suncare products. However, beauty sales slowed for the same reason.

“While many retail categories have been boosted by the long dry spell, other sectors such as department stores, fashion, footwear and hairdressing have reported lower than normal footfall and declining sales in the period,” said Retail Ireland director Thomas Burke.

Cinema tickets, homewares and sales of electrical items and computers were also negatively affected, he added.

“It’s clear not everyone has enjoyed this once in a generation spell of sustained good weather.”

Women’s clothing sales were hurt by both lower footfall in June and consistently cold weather in April and May, the industry group said. Despite this, department stores have still managed a 4.1 per cent rise in the volume of sales year-on-year, while the more “sluggish” fashion, footwear and textile trade saw the volume of sales rise 2.3 per cent.

‘Temporary relief’

Magazine sales received “temporary relief” to their pattern of long-term decline from both the World Cup and the royal wedding between Britain’s Prince Harry and US actor Meghan Markle, a popular cover star.

“This trend reflects a broader move towards event-led retail in recent years, as retailers seek to leverage such events to help promote consumer spend,” said Mr Burke.

Stores in the wider books, newspapers and stationery business recorded a 5.9 per cent lift in sales volumes in the second quarter compared to the same quarter in 2017, with the books market also performing well.

Convenience revamp

While convenience stores and fuel stations selling “on the go” food and drink have been a key beneficiary of extremes in the weather throughout 2018, the sector is also expected to grow thanks to store upgrades and the general improvement in consumer sentiment.

Bank of Ireland has expressed confidence in the prospects for growth outside Dublin as some 70 per cent of loan approvals in the grocery and convenience sectors relate to properties outside the capital.

Owen Clifford, the bank’s head of retail convenience, said the positive outlook comes on the back of an improving customer experience driven by Irish family businesses seeking to compete with international operations.

Mr Clifford gave the example of an independent retailer in Sligo who spent €1 million on transforming his Centra store.

“Irish grocery and convenience retailers are finding that store revamps are a catalyst for proactively engaging with their existing customer base and the wider communities that they serve.”