Retail sales up slightly but shoppers still being cautious

BAR sales jumped last month as did hardware and clothes sales but shoppers remain cautious about splashing their cash.

Overall the volume of retail sales were up by 2% in October compared with the same month last year. This is the largest annual rate of increase since May, according to figures from the Central Statistics Office (CSO).

Helped by a 3.3% monthly increase in motor trades, total retail sales volumes rose by 0.5% month on month in October.

Bar sales increased by just over 1% last month but are down 8.1% in value terms over the last year. The last month that bar sales increased was in June this year.

Retail Ireland director Torlach Denihan said that while it is encouraging that the annual trend in core retail sales, excluding cars and pubs, became less negative in September, the reality is that shops are selling less than they did a year ago.

“The negative year on year trend is especially pronounced for furniture and to a lesser extent for electrical suppliers, bookshops, newsagents and hardware shops. There was however some good news for department stores.

“The Government must communicate in clear and easy to understand terms what the budget tax increases will mean for individual consumers so that they can quickly reassess their circumstances and make spending decisions,” he said.

Five of the thirteen retail categories recorded an increase in sales volumes in October.

In addition to the decent performance in motor trades, sales of hardware, paints and glass rose by 3.3% from September.

Meanwhile, publicans had a better month, with bar sales rising by 1.3% and sales of clothing and footwear rose for the third consecutive month, to the tune of 1.2%.

The categories experiencing the largest fall in sales volumes in October were some of those most related to the housing sector, including furniture and lighting (-6.0%) and electrical goods (-4.0%).

Ulster Bank economist, Lynsey Clemenger said that while October was a slightly better month for the retail sector in a general sense, the consumer is likely to remain cautious in relation to non-essential spending given the weakness of the labour market situation.

“This said, it is important to point out that even though spending is weak and confidence is fragile, the situation is nowhere near as bad as in the period of unprecedented decline in the first half of 2009,” she said.