2017 before retail sales return to peak levels

RETAIL spending will not return to peak levels until 2017 as shoppers put a halt to outlay.

Sales of household equipment were down 22% in the year to May, while clothing and footwear sales fell 17%, according to the Central Statistics Office (CSO).

Bar sales were down 11% and fuel sales are fell just over 11%.

NCB economist Brian Devine said the recovery in economic growth will likely occur next year but the retail environment in Ireland will remain “extremely challenging”.

He does not expect to see retail sales return to 2007 peak levels until at least 2017.

Davy economist Rossa While said many retailers entered the crisis with fat margins but they have been significantly eroded over the last year.

Housing-related categories suffered most in the period with hardware, paint and glass experiencing a 27% annual decline in sales volumes in May, while sales of electrical goods fell by an annual 31%.

Discretionary purchases, such as clothing, are also down sharply after holding up relatively well. In May, the volume of sales of textiles and clothing fell by 17% annually.

Goodbody economist Dermot O’Leary said: “The pressures on household finances from job losses and after-tax pay reductions are still substantial. We would be comfortable with our call that consumer spending will decline by 9% in 2009, with a fall of 6.5% in 2010.”