Retail sales down over 3 per cent

Retail sales declined again in the third quarter of 2010, according to new figures from Retail Excellence Ireland.

The organisation's Irish Retail Industry Performance Review shows sales were down more than three per cent as against the same three-month period a year earlier.

However September just fell shy of like-for-like parity, recording a minimal decline of 0.21 per cent. Like-for-like sales declined by 5.24 per cent in July and 3.87 per cent in August.

“The good news coming from REI’s quarter three retail sales figures is that September recorded the lowest monthly drop this year, boosted by summer sales and the back-to-school period," said REI chief executive David Fitzsimons.

"The bad news is that retail sales are still in decline, and like-for-like growth in 2010 will most likely be determined by the reaction of consumers to the upcoming Budget,” he added.

Retail Excellence Ireland review canvassed 360 member and non-member retail companies, representing approximately 2,500 independent stores throughout Ireland.

According to the study, Jewellery and Footwear were the strongest performing sectors in the industry, recording growth levels in September of 4.96 per cent and 3.80 per cent in the third quarter as a whole.

Ladies Fashion was the worst performing retail sector in terms of sales during the third quarter, reporting a 5.42 per cent decline compared with the same period in 2009.

The Grocery sector also performed badly, falling 4.97 per cent from the same quarter a year earlier.

Rent cost as a percentage of sales modified to 11.56 per cent from 12.47 per cent during the third quarter, REI said. Wage cost as a percentage of sales also continued to fall, from 16.07 in July through to September 2009 to 15.64 per cent for the same quarter this year.

The Average Transaction Value (ATV) is now €40.53 – a drop of 12.6 per cent on the third quarter of 2009.

REI said retailers would now be looking to the valuable Halloween and Christmas periods to help lift overall sales figures for the year, but that the Budget could impede expected growth if consumers are fearful to spend.

“We have now entered the final quarter of trading for 2010 and as per the last three years, retailers will be putting all their energy into driving sales around Halloween and Christmas in an attempt to achieve like-for-like growth in 2010," said Mr Fitzsimons.

"Our data confirms that around the time of a budget, consumers freeze their spending in the run up to, and also after, the announcement have been made, so any expected return to growth, or even parity, in 2010 hinges on the consumer reaction to Budget day in December,” said Fitzsimons," he added.