Drop in 2012 retail sales expected

A further fall in retail sales is expected during 2012, despite latest figures showing a healthy pick-up in consumer spending in December.

According to the CSO, retail sales volumes grew by 2.1% last month, when compared to November, and were up by 3% when measured on a year-on-year basis. Healthy spending increases were evident across department stores, bars and pubs and in the motor trade; but much of this activity had been expected due to the festive season and consumers bringing forward some bigger buys ahead of this month’s VAT increase. The monthly rise was ahead of analyst expectations and the annual increase was the biggest since last January.

On a value basis, sales rose by 2.9% on a month-by- month basis and increased by 3.4% on an annualised basis. The CSO figures follow on from statistics issued by Retail Excellence Ireland earlier this week — which showed a rise in December, but a 1.58% annualised drop for the fourth quarter of 2011, as a whole. Certainly, commentators greeted yesterday’s figures with lukewarm enthusiasm.