‘No evidence’ of retail turnaround

CONSUMERS are cutting back on petrol purchases with sales at the country’s forecourts down almost 13% in the last year.

Motorists are hitting back at rising fuel costs and are using their cars less. Last month, fuel sales fell 2.2%.

Bar sales have plunged by close to 10% in the last year and were down 1.4% last month, according to retail figures issued by the Central Statistics Office (CSO).

However, consumers took to the high streets, with clothing sales up 2% last month and department store sales increasing 1.6%.

Consumer spending is showing signs of stabilising but experts say that, going forward, it will be subdued.

Last month, the volume of sales rose by 0.1% compared with February but sales were 1.7% lower compared with the same month last year.

Retail Ireland director Torlach Denihan said core retail sales have fallen for the entire first quarter of 2011, having declined for the previous three years and said there is no evidence of a turnaround yet.

“All sectors of retail are finding trading conditions difficult, but particular mention must be made of the continuing implosion of the market for furniture, electrical goods and books,” Mr Denihan said.

Excluding motor sales, which have been boosted over the year by the scrappage scheme, there was an increase of 0.1% in March but an annual fall of 3.5%, according to the CSO.

Total sales volumes fell by 2.3% in quarter one compared to the fourth quarter of 2010, the largest quarterly drop since the first quarter of 2010.

Bloxham economists said personal consumer expenditure on goods and services accounts for 53% of GDP and until the household sector boosts its spending habits the Irish economy won’t return to its full growth potential.

Chambers Ireland said the decrease in the volume of retail sales in March shows that action is needed now to support the retail sector.

This was echoed by the small business group, ISME, which has called for the “immediate introduction” of a retail strategy group.

ISME chief executive Mark Fielding said: “Retail is on the front line and the first to feel the downdraft of the recession.

“It is high time that the Government introduced policies to support one of the most significant contributors to the economy.”

ISME said the strategy group could address risks to the sector and recommend to the Government policies to tackle the cost base, in order to secure the 250,000 jobs in the retail industry.

Davy stockbroker Conall Mac Coille said retail sales might have been expected to fall further in March.

“Weak consumer confidence, the negative impact on real incomes from the fiscal adjustment and weak nominal pay growth suggest that a sustained recovery in consumer spending remains elusive,” he said.