Annual retail sales down 4.8%

Retail sales declined by 17.3 per cent in January compared to the preceding month, according to new figures from the Central Statistics Office (CSO).

For the year ending January 31st 2010, retail sales volumes were down by 4.8 per cent, or by 4.7 per cent if motor trades sales are excluded.

The majority of sectors showed year-on-year declines with retail sales in bars down 9.9 per cent, motor trades declining 4.5 per cent, clothing, footwear and textiles falling by 4.2 per cent and pharmaceutical, medical and cosmetic articles down 2 per cent.

The "other retail sales" segment saw volumes fall by 11.7 per cent over the year under review.

The value of retail sales fell by 8.4 per cent over the 12-month period, and there was also a monthly decrease of 15.6 per cent from December 2009 to January 2010.

If motor trades sales are excluded, the annual fall in the value of retails sales was 8.3 per cent and the monthly change up 0.6 per cent.

Commenting on the figures business group Ibec said they were "welcome indications of stabilisation in the economy".

Ibec economist Reetta Suonperä said: "Though labour market conditions will remain difficult throughout 2010, the worst of the job losses appears now to be behind us. This will help stabilise consumer confidence and spending.

"The January retail sales figures are also more encouraging, but only in context of 2009, when sales in many sectors were essentially in free fall," she added.

Ulster Bank economist Lynsey Clemenger said retail sales figures continue to be heavily skewed by motor trades, while core sales showed the consumer entered 2010 on a slightly firmer footing.

Alan McQuaid, chief economist at Bloxhams stockbrokers, said although there have been signs of improving consumer sentiment in recent months, the further erosion of disposable incomes arising from lower wages and an increased tax burden, due to the carryover from 2009, will give little scope for increased demand in 2010.

He added the prospect of higher mortgage interest rates will also act as a drag on overall personal expenditure.

"Taking all the factors into account, we are forecasting an overall decline in real personal spending on goods and services of 1.8 per cent in 2010 as against an estimated fall of 7.3 per cent in 2009," he said.

Elsewhere, Retail Ireland said the latest figures show the sector is continuing to face "a very negative trading environment."

The organisation's director Torlach Denihan urged the Governemnt to reform the arbitration process and build on the decision to ban upward only rent reviews in new leases by extending the ban to existing leases.

"Unless there is action in these areas, many more retail staff will join the 30,000 retailer employees who ended up on the Live Register in 2009,' he said.