Retail sales rise despite cost-of-living squeeze

Retail sales rose in March despite the cost-of-living squeeze as consumers spent more on pharmaceuticals and cosmetics and in department stores.

However, there were notable declines in several areas, including spending in bars and spending on electrical goods.

The spike in inflation, triggered by higher energy costs, is expected to negatively impact consumer spending trends in the coming months. Several forecasters, including the Department of Finance, have downgraded their forecasts for growth on the back of weaker consumer spending in the coming months.

The latest retail figures from the Central Statistisc Office (CSO) show volumes were up 0.6 per cent month on month in March.

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Sectors

The sectors with the largest monthly increases were pharmaceuticals, medical and cosmetic articles (+9.9 per cent) and department stores (+7.4 per cent) recorded the largest monthly volume increases

The largest monthly volume decreases were in bars (-19.6 per cent), electrical goods (-15.8 per cent) and food, beverages and tobacco (specialised stores) (-10.3 per cent)

Despite the acceleration in inflation (now running at a 22-year high of 6.7 per cent) and a major cost-of-living squeeze, retail volumes were up 2.9 per cent year on year in March. Compared to February 2020 (25 months earlier and pre-Covid), the volume of retail sales in March 2022 was 4.4 per cent higher.

The CSO said several sectors showed “very large annual increases” in the volume of sales, compared with March 2021 when a full lockdown of non-essential retail and services was in force.

Increases

The volume of sales in bars rose by 611 per cent compared with March 2021. Bars were closed in March 2021 except where there were ancillary services, it noted.

Despite the large recovery in March over the previous year, bar sales remained 40.4 per cent lower than pre-Covid levels in February 2020.

Other sectors showing large annual increases were clothing and footwear (+271 per cent) and department stores (+81 per cent).

“In these sectors, the annual increase reflects a recovery from a very low base in March 2021 when the country was in Level 5 lockdown,” the CSO said.