Retail sales continue to fall

Retail sales for the second quarter were down more than 16 per cent compared to the same three-month period a year ago, according to new figures from industry body Retail Excellence Ireland (REI).

REI’s Irish Retail Industry Performance Review Q2 2009, show that retail trading entered its sixteenth month of consecutive decline at the end of the quarter, although the decline eased slightly in June.

Average retail sales per square foot were down by 24 per cent to €143.21 compared with the same quarter a year earlier and the Average Transaction Value (ATV) of €47.55 is the lowest recorded since REI's research began more than two years ago.

Wage cost as a percentage of sales was on a par with the first quarter at 18 per cent, as against 16 per cent a year earlier. Rent cost as a percentage of sales is running 34 per cent higher than the second quarter of 2008 at 13 per cent, the highest level in two years.

The latest figures show that the menswear category experienced the biggest drop in sales during the second quarter while footwear and jewellery also suffered heavy losses.

“If there is any silver lining to be gleaned from these figures it’s that the rate of deterioration in the retail industry showed signs of levelling off in June with a slowdown in the rate of decline to 12 per cent. This provides the faintest glimmer of hope for retailers but it is far too early to predict that the curve is beginning to trend upwards,” said REI chief executive officer David Fitzsimons.

“As consumer sentiment remains at an all time low, the industry has now entered a phase where extensive losses are being experienced by the majority of retailers. Of greatest concern to the industry is the fact that margins have had to be sacrificed, while for highly indebted sectors, such as pharmacy, there are significant additional banking pressures around servicing of debt, he added.

The REI performance review is based on data from 360 member and non-member retailers - representing approximately 2,500 individual retail stores across Ireland- and analysed the performance of the pharmacy, menswear, ladies fashion, jewellery, grocery, giftware/ homeware and footwear trades.

Retail Excellence Ireland is a not-for-profit organisation which representing more than 580 companies with about 8,000 stores across the country.