Volume of retail sales down 2.8% in March compared to last year

The volume of retail sales decreased by 2.8 per cent in March compared to the same month last year, according to the latest figures from the Central Statistics Office (CSO).

The figures, which are seasonally adjusted, also show retail sales fell by 2.2 per cent compared with February.

Excluding motor trades, there was a decrease of 1.4 per cent in the volume of retail sales compared with February, and an increase of 2.3 per cent in the annual figure.

The sectors with the largest monthly volume decreases were hardware, paints and glass (-11.4 per cent), and furniture and lighting (-8.4 per cent).

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The sectors with the largest month-on-month volume increases were electrical goods (0.9 per cent), and bars (0.6 per cent).

The value of retail sales decreased by 4.1 per cent in March compared to the same month last year, and was down 3.4 per cent compared with February.

If motor trades are excluded, there was a decrease of 1.7 per cent in the month and an increase of 0.2 per cent in the annual figure.

Merrion analyst Alan McQuaid said the adverse weather was “clearly a factor” in March. “But it should also be pointed out that headline sales have fallen for four months running on a monthly basis, so there may be more to it than just that,” he said.

“Looking ahead to 2018, we think personal spending will post another positive rise as the unemployment rate drops below 6 per cent and disposable incomes rise, though the increase in headline retail sales is likely to be lower than 2017, at 1.0-1.5 per cent.

However, he added that “core sales”, which is everything apart from motor sales, should be higher at 4.5-5 per cent.

An analyst with Davy also pointed to the weather. “At face value, today’s sharp fall in core retail sales, down 1.4 per cent on the month in March, should be a cause for concern,” he said.

“However, as with much of the recent data releases, poor weather events have dragged on activity. Sales volumes therefore should bounce back strongly in April and continue to grow robustly in the near term, driven by strong growth in the labour market and household incomes.”

In terms of the “bigger picture”, the analyst said sales volumes “should bounce back strongly” in April and continue to “grow robustly” in the near term.

This will be driven by “strong growth in the labour market and household incomes”.

Overall in the first quarter, core retail sales growth fell to 0.3 per cent from 0.9 per cent during the final quarter of 2017, but this slowdown in consumer spending “should prove transitory”.