Volume and value of retail sales up 0.9%

September saw near 1% increases in the volume and value of retail sales, with electronic goods sellers, department stores, and bars benefiting most.

The latest monthly CSO figures measured a 0.9% rise in the volume and value of consumer spending, when compared to August.

Furthermore, September’s activity represented a year-on-year rise of 1.4% in volume terms and 2.2% in terms of value.

On a monthly basis — when car and vehicle transactions are excluded — sales volumes were up by 0.6%.

The significance of the September figures was that they represented the best annualised increase since last December, with bar sales showing their first increase for nearly five years.

While welcoming the latest figures, most commentators were yesterday viewing them as something of a positive blip — saying the run-up to the unveiling of Budget 2013 will see consumer spending dry up again.

“With the budget looming, in which €1.25bn of tax rises are due, consumers may pull back on spending and continue to pay down debt,” said David McNamara of Davy Stockbrokers.

“So retail sales might yet fall back in the fourth quarter, which would leave sales down in 2012, as a whole.

“We expect consumer spending to decline by 1.9% in 2012 and by 0.5% in 2013,” he added.

Goodbody Stockbrokers economist Juliet Tennent said: “Despite the positive headline number, underlying trends point to continued weakness in consumer spending, with most retailers — the notable exception being publicans — having to discount to maintain volume levels.

“We expect the weak employment backdrop and the lack of credit prospects to continue to act as headwinds to consumption, with the uncertainty surrounding the upcoming budget also likely to have a dampening effect.”

Merrion Capital economist Alan McQuaid said the latest CSO data suggests consumers may be starting to tentatively spend again, but any major upward rise in spending patterns, over the coming months, remains unlikely.

“Heightened anxiety about the prospects for future incomes are set to persist due to the high level of unemployment and further austerity measures in the forthcoming Budget, such that consumers are likely to maintain buffers to protect against adverse income shocks,” he said.

Merrion has lowered its consumer spending decline forecast, for 2012, from 2% to 1%.