RETAIL SALES:THE DECLINE in consumer spending, in evidence since May, continued in July. The latest CSO figures show the value and volume of core retail sales fell when compared to June levels.
The volume of non-motor retail sales – which excludes price effects – decreased by a full 1 per cent month-on-month. This was the largest decline since August 2009. The value of sales fell by 0.6 per cent on June.
The recovery in retail sales which occurred in the first months of the year has been reversed, with consumer spending falling back close to the low point registered at the turn of the year.
Once again the motor trade continued to recover, with motor sales rising in volume terms by 0.6 per cent in the month and almost 14 per cent over the year.
When the motor trade is excluded from the July figures, the drop in volume was 2.5 per cent, rather than 0.1 per cent.
The CSO numbers show that 10 of 13 retail sub-sectors experienced a weakening of sales – in both value and volume – in July when compared to June.
The effect of weakening consumer demand on the high street was evident across a range of retail sectors, including department stores and the furniture and lighting sub-sector, both of which had a 5.9 per cent drop in sales on the month.
Sales of electrical goods were up by more than 2.5 per cent since June.
The bar trade saw a significant drop in sales, with sales down 2.6 per cent on the month in volume terms and 11.5 per cent on an annual basis.
Retail Ireland, the Ibec group that represents the Irish retail sector, described the figures as “very disappointing”.
“The underlying trend of stabilisation and recovery in retail sales that was emerging earlier this year seems to be stalling. This underlines the fragile state of consumer spending and the retail sector generally” said Retail Ireland’s Turlough Denihan.
He said while the cash value of core retail sales was now over 20 per cent less than before the start of the recession, the cost of running a retail business had not fallen.
The figures suggest that the Irish consumer is “running out of steam”, according to Bloxham’s Alan McQuaid. “The bottom line is that the labour market remains very weak, as reflected in the further pick up in the live register in August, and the unemployment rate rising to 13.8 per cent. Until the labour market stabilises and consumers become more confident about job prospects then spending will remain subdued.”
Dermot O’Leary of Goodbody Stockbrokers said the value of retail sales continued to fall at a time when price deflation, albeit at a slowing pace, was widespread.
