Retail sales in July rise by 0.7%

The volume of retail sales increased by 0.7% between June and July, driven mainly by sales of clothing, hardware, and fuels.

Despite the increase the CSO figures show a fall of 1.6% in the value of sales in Jul 2012 compared with the same period last year.

It is the second month in a row that the value of retail sales declined by more than 1% year-on-year. In June the total volume of retail sales was down by 1.3% over the year.

Isme chief executive Mark Fielding said: “While there was a small monthly increase of 0.7%, more and more retailers are still finding it harder to make ends meet. One-third of retailers expect further job losses as the negative trading environment persists. The latest figures clearly show how the lack of consumer confidence is crippling the sector.”

There were increases in the volume of sales in a number of sectors. Clothing, footwear, and textiles sales were up 5% while hardware, paints, and glass increased by 4.5%, and fuel by 3.8%.

However, there were falls in the volume of electrical goods, down 1.9%. Bar sales were down 1.7% and books, newspapers, and stationery declined by 0.9%. Department store sales fell 0.5%.

Davy analyst Conall MacCoille said spending patterns have been erratic and these figures continue the trend.

“The pattern of consumer spending has been erratic. The rise in the Vat rate to 23% led households to bring spending forward into 2011,” he said.

“Consumer spending rose by 1.8% in Q4 2011, but contracted by 2.1% in Q1. The retail sales data are consistent with this erratic pattern, but also indicate that spending stabilised in Q2.”

While erratic spending continues, consumers have been hoarding money. A survey by EBS Ireland reveals that 84% of people are now saving regularly.

The impulse to save is being driven by the EU crisis: A majority of those surveyed cited uncertainty at the centre of Europe as a key reason for saving.

The head of savings with EBS, Richard Kissane, said: “While 84% of people are saving, fewer than three in every 10 people are using a regular savings account. We would encourage individuals to review their savings activity.”