Retail industry continues to recover in Q2

Sales of coffees thought to be indicator of better labour market

Many segments of the retail industry – ladies fashion, footwear and garden centres – bounced back strongly in the second quarter of the year when compared to 2013 as shoppers were buoyed by good weather in April.

The market slipped marginally last month, however, as the appetite for foreign holidays increases among Irish families, according to new research.

Sales across the retail industry rose 1.96 per cent between April and June compared to 2013, according to new figures from Retail Excellence Ireland (REI).

The lobby group’s quarterly industry sales review collates point-of-sale data from 4,500 retailers, whose till systems are linked directly to the market research firm GfK.

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The study found that while sales on average grew by 4.58 per cent in April – boosted this year by the timing of the Easter holidays – growth was less than 1 per cent in May and sales declined 0.3 per cent in June. REI attributed this in part to “the increase in families holidaying abroad”.

"The days of the exponential declines are over. But it would have been good to see higher rates of growth in May and June," said David Fitzsimons, the chief executive of REI.

Garden centres were the standout performers of the period. Sales in April spiked by almost 50 per cent as people took advantage of good weather during Easter to carry out home improvements. Growth slowed dramatically over the next two months, but still averaged more than 12 per cent for the quarter.

Ladies fashion, up 6.24 per cent, menswear, up 3.65 per cent, and children’s wear and footwear all posted strong performances over the quarter as confidence seeped back into consumers.

The study also showed that the “hot beverage category”, covering coffee chains and garage forecourt hot drinks sales, rose by close to 8 per cent.

Mr Fitzsimons agreed that the category’s performance pointed to an improved labour market – workers tend to drink more coffees on-the-go.

“Hot beverages are a really good indicator of footfall. People are much more active than they were, whether it’s shoppers or workers,” he said.

Sales in categories that traditionally benefit from an improved property market also rose. “”White goods” electronics, such as fridges and washing machines, rose by 7.1 per cent in value and 17 per cent by volume, while furniture and flooring sales rose 5.17 per cent.

Grocery sales remained flat, while pharmacy sales were hit by almost 5 per cent, mostly due to reductions in State prescription payments.

Mark Paul

Mark Paul

Mark Paul is Business Affairs Correspondent of The Irish Times. He also writes the Caveat column