RETAIL SALES continued to fall on an annual basis in September, dipping 10 per cent compared with the same month last year.
But sales rose 2.1 per cent compared to August, which was the largest monthly rise since February, according to data from the Central Statistics Office (CSO).
The figures suggest that retail sales are stabilising, although economists warned yesterday that high rates of saving among cautious consumers may keep retail spending subdued until next year. The latest fall follows a 9 per cent drop in annual sales in August.
The CSO data shows that the most significant declines in sales were seen in the motor trade, which fell 29.3 per cent annually, and household equipment, which recorded a decline of 13.1 per cent compared with the same period in 2008. However, a recovery in motor sales was also responsible for much of the month-on-month rise in sales.
Excluding the motor trade, volumes fell 6 per cent compared to September 2008 and grew by 1.5 per cent on a monthly basis. Sales at bars were down 10 per cent for the year, while clothing and footwear fell 5.9 per cent.
On a value basis, retail sales showed a fall of 14.8 per cent year on year. Compared with August, however, the value of sales rose 1.1 per cent.
In the July-September quarter, volumes of core sales (excluding motors) posted their first quarter-on-quarter rise since the end of 2007, rising by 0.4 per cent. This better performance for quarterly retail sales reflects the stabilisation in unemployment rates, according to Ulster Bank economist Lynsey Clemenger.
“Importantly, the improvement in the Live Register data does appear to be having some impact on consumer spending,” she said.
Davy Research said consumer spending was likely to grow again in 2010, by 1.5 per cent on average in volume terms. “We think a definitive bottom will be reached when the value of sales grows steadily. For now, many bigger retailers are still comfortably eating into margins that were wide heading into the recession,” Davy analyst Rossa White wrote in a note.
The latest review of the retail sector by Retail Excellence Ireland, published last month, indicated that the rate of decline in retail sales is levelling off. However, it also found that consumers are spending the least amount per transaction in more than two years at an average of €45.64 in the third quarter, down from €66.74 a year earlier.
Retail Ireland called for action on rents and other business costs.
“With retailers taking in less money at the tills the employment prospects for the sector are a source of very serious concern,” said Retail Ireland director Torlach Denihan. “Landlords are not doing enough to cut rents and . . . the cost burden it imposes on the sector,” he said.
