Retail sales keep climbing in August, CSO figures show

Retail sales continued on a slow upward trend in August, with the latest data from the Central Statistics Office (CSO) coming in ahead of expectations.

The figures show that the value of retail sales increased by 4.3 per cent in August, when compared to the same month last year.

The annual increase in volume - a measure excluding the effects of price - was 1.2 per cent. If traditionally volatile motor sales are excluded however, the year-on-year rise was 4.8 per cent.

On a three-month view, which gives a more stable indication of underlying trends, the volume of sales between June and August was 0.5 per cent higher than in the previous three months.

AIB economist Ms Geraldine Concagh said that the slight improvement in the numbers, while surpassing expectations, was indicative of a "marked deceleration in consumer spending".

"We have seen this trend since the beginning of this year," said Ms Concagh, who suggested that continued contributions to Special Savings Incentive Accounts (SSIAs) were limiting the freedom consumers had to spend.

"The SSIAs are taking about €200 million per year out of the economy. If you take that much disposable income out of an economy the size of Ireland's, it would have an impact," she said.

Mr Colin Hunt, chief economist with Goodbody Stockbrokers, said that the sales data pointed to a "gradual, mild recovery in the retail sector".

He drew attention to what the numbers suggested about inflationary pressures in the economy, noting that a Goodbody analysis showed the underlying price increases in the retail sector to be running at 2.9 per cent.

Within this, he said the lowest inflation was detectable in textiles, where prices were falling at a rate of 6 per cent, and the volume of sales growing by about 12 per cent. In contrast, he said, price increases of 6.9 per cent could be seen in bars, where volume growth was at its lowest. "Consumers are conscious of the fact that less disposable income growth should make them more price-sensitive. The Government can talk about price controls, but the most effective anti-inflationary tool is the consumer," said Mr Hunt.