Lower December retail sales disappoint

The Government will be disappointed with the release of the retail sales figures for December, which came in much lower than expected.

Anecdotal evidence had suggested that Christmas sales were well ahead of the past few years. However, latest figures from the Central Statistics Office show that the volume of retail sales were down 0.1% compared with November, while there was an annual decrease of 1%.

Excluding the effects of the motor trade, the volume of retail sales increased by 0.8% compared with month earlier levels, and were 0.8% ahead of December 2011 levels.

The value of retail sales in December was unchanged compared to November, while there was a decrease of 0.7% over the 12 months. Excluding the effect of the motor trade, there was a monthly increase of 0.3% and an annual increase of 1.1%.

Within the figures there were large variations between different sectors. Department stores experienced a 6.3% increase in business in December compared with November.

The pub trade was up 4.4% and Books, newspapers and stationary had a 3.4% lift over the same period.

However, furniture and lighting was down 7.1% and other retail sales decreased by 3.1%.

The head of the Irish Small & Medium Enterprise Association (Isme), said, “It is obvious that the retail sector is in dire straits with retail volumes down during what should be a good time at Christmas.

“The continued downturn is as a result of shoppers curbing spending due to uncertainty, as many have suffered pay freezes or job losses. At the same time smaller indigenous retail business costs are running ahead of inflation, with many at the sharp end of upward-only rent reviews.

“While the sector is being annihilated the Government stands idly by. Delays in the introduction of the Code of Practice are leading to SME producers being screwed by large multiples; the abolition of the groceries order means that the consumer is now paying more, rather than less for product in the multiples; all as a result of a total lack of any coherent government policy for the sector.”

Chambers Ireland deputy CEO Seán Murphy said: “This is a disappointing set of results for the broader retail sector throughout Ireland. Despite positive soundings from our affiliated chambers in the border regions that fewer people went north of the border for their Christmas shopping and many Northern shoppers were coming south, these figures show that consumer confidence remains low and the Government continues to struggle on the issue of domestic demand.”

The Government had been hoping for a bumper retail period over Christmas to boost exchequer figures over the first two months of this year and help meet the budget deficit target of 7.5% at the end of the year.

Moreover, the sluggish retail figures confirm that the domestic economy continues to struggle.

NCB research analyst Emmet Gaffney said that despite the economic and fiscal headwinds, retail sales performed relatively strongly in the second half of last year, with core retail sales now in positive territory on an annual basis in both volume (0.8%) and value (+1.1%) terms for five successive months.

“That the positive underlying trend in core retail sales remained intact in December tallies with positive noises from the industry regarding trading over the Christmas period.

“For the year as a whole, core retail volumes were down marginally in 2012 (-0.2%), a material improvement on 2011 (-2.6%),” she added.

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