Value drop in pound boosts Irish sales

Almost all categories of retail sales are posting increases helped by the drop in the value of sterling against the euro which is pulling down the prices of many goods in Irish shops.

CSO figures showed by volume all but two categories of retail sales posted gains in April from a year earlier and also rose in the three months February to end of April.

In April, sales of furniture and lighting, which soared by almost 21% from a year earlier and sales at department stores, which climbed by 8.3%, showed the largest gains. Furniture and lighting and electrical goods were the top two performers in the three months to the end of April from the same period in 2016. Bar sales, which is a reliable indicator of consumer spending, were up 5.6% in the year in April and by 4.3% in the three month period from 2016.

Overall, the volume of retail sales was up 6.4% in the year in April and was up 6% in the three-month period, if motor trades are excluded. The figures continue to show car sales have fallen, as the effects of sterling’s crash against the euro since last summer’s Brexit vote continues to bite.

In May, sales in the motor trades fell 3.7% from April 2016 and dropped by over 4% in the year in the three months to the end of April.

“While car sales continue to act as a drag on retail spending, core sales remain on a solid uptrend,” said Goodbody chief economist Dermot O’Leary.

“Car sales have been heavily influenced by cheaper used car imports from the UK due to weaker sterling,” adding that “the weakness in new car sales, therefore, cannot be taken as an indication of consumer caution”. Mr O’Leary said falling prices are “an ongoing feature” influencing sales. When measured by value, the CSO figures show overall sales rose by 3.4% in April from a year earlier and were up by an annual 3.3% in the three months, once motor trades were excluded.

With the exception of new car sales, sterling’s weakness is helping many Irish retail businesses, the figures suggest. “Whereas sterling’s depreciation is now hurting UK consumers, the opposite is occurring in Ireland,” said David McNamara, economist at Davy Stockbrokers.

“Nearly one-third of Irish consumer goods are imported from the UK and sterling’s depreciation has contributed to a 2.8% annual decline in Irish retail prices — helping households’ real incomes,” he said.

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