40,000 jobs at risk as retail sales fall

BIG falls in ladies clothing and electrical goods resulted in retail sales declining by 6% in the last quarter.

Retail Excellence Ireland said sales fell in all categories and it expects that a further 40,000 jobs could be at risk if the tough times continue.

The 6% year-on-year sales fall compares to a decline of 3% in the first quarter. June was the 40th consecutive month of sales decline.

Sales of electrical goods fell by 9.5% while ladies fashion was down 8%. The best performing sector was hot beverage sales which fell more than 3%.

REI chief executive David Fitzsimons said the decline in retail sales has not yet reached the bottom.

“While many had hoped that during 2011 the relentless decline we have seen since 2007 would level off, this is simply not happening. Consumers are continuing to hold back on many of the purchases that were commonplace in recent years.

“Declines in areas like ladies fashions and electrical goods are symptomatic of this depressed consumer sentiment,” he said.

With further anticipated interest rate rises and the Government continuing to talk of increased charges, Mr Fitzsimons said he doesn’t anticipate any pick-up in sentiment in the coming months.

He said many retailers will be forced to close and more retail jobs will be lost.

“In addition to the 40,000 retail jobs have already been lost since 2008, we estimate that a further 40,000 jobs are currently under threat,” he said.

Like-for-like sales declined by 4.5% in April, 8% in May and 6% in June, year-on-year.

The grocery and pharmacy sectors were among the best performing. However, both sectors experienced year-on-year falls in sales levels of 5%, largely because they are non-discretionary items, according to REI.

The Average Transaction Value (ATV) continued to decline, with an average reduction of 6% across all retail sectors.

The menswear sector has seen the most pronounced fall from €63.92 in quarter two 2010 to €56.56 in the same quarter this year.

Wage costs as a percentage of sales fell to 15.25% last quarter from 15.79% a year ago, demonstrating both a reduction in hours and rates over the last year and that operators are now willing to modify labour investment to meet market conditions and keep jobs where possible.