Retail sales lack sparkle despite rise in wages

By Eamon Quinn

Sales of furniture and electrical goods have risen, bar sales are mixed, and sales of food and cars have lagged, despite official figures showing a rise in wages in recent months.

Average weekly earnings rose 2.4% in the first quarter from a year earlier, according to separate figures released by the CSO.

The figures for retail sales figures covering the three months to the end of April help exclude the timing differences of Easter and other short-term effects that can distort any analysis of retail sales based on a single month.

Furniture and lighting products continued to sell well. They were -up by 7.6% and 3% in terms of volume and value in the three months to the end of April, suggesting rising confidence of some householders about their finances.

However, sales of electrical goods, which surged by over 11% while the value of those sales fell 1%, paint a picture of a highly competitive economy and squeezed household finances in which retailers still need to rely on hefty discounts to drive or just to hold onto sales.

The fall in the sales of food, beverages and tobacco also show that discounting is playing a large part.

By volume, food sales were down year-on-year by 0.5% and fell 2.6% when measured by the value of those sales, after discounts are taken into account.

Sales of clothing rose by only 0.8% in terms of volume, but fell back sharply, by over 2% in terms of the value of those sales.

Sales of electrical products surged over 11% in the year, but they also fell 1% in terms of value.

Hardware and paint sales did better. They were up 4.8% in volume terms and by 2.6% in value terms.

Bar sales over the three months were mixed. While down in the three months to the end of April by almost 1% in terms of volume, they rose 1.5% in terms of value over the same period.

Car sales were little changed in the three months to the end of April and fell 0.8% in terms of the value of those sales.

In April, retail sales were up 1.5% from March, and were up 4.8% from April 2017 in value terms.

Excluding motor sales, sales rebounded from the bad weather in March to post increases of 1% in the month and 3.8% in the year.

Overall, there was a solid increase but not a spectacular or “champagne-uncorking” rise in sales, said Austin Hughes, chief economist at KBC Bank Ireland.

The economy is improving and earnings are rising, but consumers remain cautious and are still seeking bargains despite the increase in earnings, he said.

The 2.4% annual increase in the first quarter brought average weekly earnings to over €742, according to CSO figures.

Increases were posted across all but one sector but were driven by the public sector where pay awards withdrawn during the economic crisis were recently restored.

Public sector average weekly earnings climbed 3.8% in the year, to almost €951. Private sector wages rose 1.8%, to over €684.

By sector, wages have risen the fastest, by 7.6%, in the information and communication industry, with weekly wages reaching almost €1,180.

Financial, insurance, and real estate jobs posted an increase of 4.9%, to over €1,229 in average weekly earnings.

Wages in administrative jobs fell 1% to almost €546.

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