Retail sales rise 3% in February

The volume of retail sales rose 3 per cent in February, the first year-on-year growth since January 2008, the Central Statistics Office said today.

Rising car sales helped boost sales figures, with 30.5 per cent growth year on year. Excluding the motor trade caused sales to decrease 3.1 per cent.

However, there was a rise in sales for department stores of 10.9 per cent, while sales of electrical good grew 3.5 per cent. Clothing, footwear and textiles recorded growth of 1.2 per cent compared toi February 2009.

Analysts viewed the figures as positive, saying they indicated an improvement in the economic situation.

There was a jump in sales between January and February, with sales volume rising 14.9 per cent month on month across a range of sectors. However, sales in non-specialised stores - including supermarkets - declined 1.7 per cent on the year and 1.9 per cent on a monthly basis.

Chief economist with National Irish Bank Dr Ronnie O'Toole said there were signs that consumer spending had reached a bottom, and improving consumer sentiment should stabilise jobs in the retail sector.

"The retail sector has been one of the worst affected in terms of job losses over the past two years. The employment of sales staff started falling in the second quarter of 2008, as the massive layoffs in construction from 2007 started to spread to the rest of the economy," he said.

"Since then, sales employment has fallen by 12 per cent, closely matching the fall in consumer spending. This stabilisation should be quickly felt in terms of the number of jobs in sales which are unlikely to contract much further over the course of this year."

Prices continue to fall, the survey showed, with the value of retail sales falling 1.3 per cent in February compared to a year earlier. The monthly change was a rise of 12.9 per cent as the effects of the post-Christmas sales were shaken off.

Once again, the motor trade was a significant factor. Excluding vehicle sales from the figures saw the yearly decline in value widen to a 7.4 per cent decrease, while the monthly rise shrank to 0.1 per cent.

"Although there are signs of improving consumer sentiment in recent months which should provide some support for demand, the further erosion of disposable incomes arising from falling employment incomes and an increased tax burden, due to the carryover from 2009, will continue to act as a drag on personal spending for some time to come," said Bloxham's chief economist Alan McQuaid.

"That said, there appears to be more confidence among households as regards the prospects for both the economy in general going forward and the labour market in particular, and this should act as a positive influence on the pattern of personal spending over the remainder of the year."