Retailers positive as sales increase by 3.6%

RETAILERS are reporting a more positive outlook and believe the bottom has been reached as the volume of retail sales increased by 3.6% in March compared to the same month last year.

Latest figures from the CSO show if car sales are excluded the volume of retail sales actually fell by 1.2%. The monthly change was a 0.6% increase.

The introduction of the scrappage scheme sent car sales up almost 22% in the year.

Chief economist at Bloxham Alan McQuaid said the figures give a further indication that things are improving on the economic front.

“Although we still have some way to go on the road to recovery, the risks in our view are tilted to the upside, notwithstanding the current eurozone ‘debt’ crisis which has embroiled Euroland’s ‘peripheral’ countries, including Ireland.

“If it weren’t for the debt issue we would be very confident that Ireland would return to positive economic growth sooner than what was assumed at the start of the year.”

In a reflection of falling prices the value of retail sales fell by 1.6% in March compared to the same month last year.

There was, however, a monthly increase of 2.2%.

On a quarterly basis the volume of retail sales jumped by 1.1% year-on-year while the value of retail sales declined by 3.6%.

Industry group Retail Excellence Ireland (REI) said the figures provide a “strong indication” that like-for-like growth is likely to be reported in quarter two.

Chief executive of REI, David FitzSimons said: “Following a prolonged two-year period of rapidly deteriorating retail sales, the industry is now experiencing more modified decline and many operators claim the industry has reached the bottom.”

Ulster Bank chief economist, Simon Barry said the figures are a very encouraging signal in terms of the resumption of growth in underlying consumer spending patterns.

Alan McQuaid said the further erosion of disposable incomes arising from falling employment incomes and an increased tax burden, due to the carryover from 2009, will continue to act as a drag on personal spending.