The early Christmas crowds in shopping centres and city stores have thinned since last year, reflecting a fall in consumer confidence to close to its all-time low this month. Laura Slatteryreports.
National footfall figures for November 19th to 25th are down 3.2 per cent on the same week last year, and have also fallen by the same rate for the year to date, information services firm Experian said.
The subdued start to the festive shopping season mirrors a sharp decline in consumer sentiment, with people turning pessimistic about their current and future household finances, according to the latest index from IIB Bank and the Economic and Social Research Institute.
One-third of consumers now expect their personal finances to worsen in the next 12 months, while only 9 per cent expect to their position to improve. "The awful consumer sentiment reading for November seems to reflect worries that a poorer Irish economic outlook will translate into markedly weaker household spending power in the coming year," said IIB Bank chief economist, Austin Hughes.
Confidence is now at its lowest since August 2003, having dropped to 63.1 in November. Overall sentiment now hovers close to the all-time low reached in July 2003, while the outlook for household finances is the poorest in the 12-year history of the index.
The Government needs to take the slump in sentiment into consideration in next week's budget to prevent a significant slowdown in future consumer spending, Mr Hughes warned.
"If sentiment and spending are not to deteriorate further, Mr Cowen may need to opt for a radical and imaginative budget rather than the 'holding' package that has been signalled," he said.
The gloomy outlook for household finances was sparked by concerns about a tough budget and fears that the sharp rise in oil prices will translate into higher winter heating bills. Steep losses on the Irish stock market and a 5 per cent fall in house prices this year have also eroded the value of pensions and property.
Retail sales have so far held up this year, despite plunging consumer confidence. But before this month's figures, it was concerns for the economy rather than consumers' own finances that was dragging down sentiment.
Experian property services manager Mark Mullally said there was still time for footfall to recover before Christmas.
"The fewer number of shoppers on the streets can also be explained by growth in online gift buying and the popularity of shopping trips to New York," he said.
