September retail sales down 0.8% on August

RETAIL SALES in September continued the downward trend in evidence since May, according to figures released by the Central Statistics Office (CSO) yesterday.

Core retail sales, which exclude the volatile motor sector, fell by 0.8 per cent in September compared to August in volume terms. The decline, which is adjusted for seasonal factors, was the second largest monthly fall of the year. The decline by value was slightly larger.

Core retail sales were more than 4 per cent lower in September compared with their April peak.

The rebound in the retail sector in the early months of the year has now been fully reversed. The trend over five months has been clearly negative. In September, retail sales were at their lowest levels in five years by both volume and value.

If motor trade sales are included, the decline in sales since April has been marginal, despite a month-on-month decline in motor sales in September.

The strong performance of the motor sector in 2010 has been boosted by a Governmentsponsored scrappage scheme. Postponed purchases of cars in 2009 are also likely to be boosting sales in 2010.

According to separate figures from the European Automobile Manufacturers’ Association, the decline in new passenger car registrations in Ireland in 2009 was the second largest in western Europe after Iceland. The decline of 62 per cent was far greater than falls in incomes and reflects a tendency for consumers to postpone purchases of big-ticket items at times of economic uncertainty.

Large declines are usually followed by large increases, as consumers find they can delay purchases no longer.

The recovery in car sales in 2010 continued in the third quarter of the year. Sales of cars in volume terms rose by more than 4 per cent in July-September period compared to the April-June quarter. On an annual basis, motor sales have also registered the biggest increase of any retail subsector. In September they were 13.2 per cent higher than a year earlier in volume terms.

Most other sectors performed poorly. Month-on-month declines were evident in 10 categories with only three showing rises in sales.

For the full third quarter, the pharmaceuticals, chemicals and cosmetics subsector was one of the few to register period-on-period growth. This reflects the recession-proof nature of medicine sales.

More discretionary items, such as books and newspapers, continue to register large declines. Goods linked to the property sector also fared poorly. Furniture and hardware both registered large declines month on month and quarter on quarter.