Fresh CSO figures, published yesterday, showed an 8.8% annualised jump in spending for last month and a 3.3% rise — boosted by car and furniture purchases, in the main — on a monthly basis. The figures follow on from a 5.1% year-on-year jump in December.
“Headline retail sales were up 6.4% in volume terms on average last year, while sales excluding cars were 3.7% higher in 2014,” said Alan McQuaid, chief economist with Merrion Stockbrokers.
“We are looking for a volume rise of 6% to 8% in headline sales this year, and 3% to 4% in core sales, which augurs well for Irish GDP growth in 2015, which is set to top the eurozone growth league table for the second year running.
“A key domestic driver of personal spending, going forward, will be the state of the labour market, and the signs are positive on this front, as we’ve seen with the most recent official employment and Live Register data.”
Retail Excellence Ireland has warned against complacency, however, saying aggressive discounting either side of Christmas has aided recent data.
“While the volume is up significantly year on year, the fact that value is not tracking volume is disappointing and shows once again that many parts of the country are still struggling,” said Retail Excellence Ireland deputy chief executive Sean Murphy.
“Annualised growth of retail sales volume, excluding motor trades was 4.8%, while the annualised value only increased by 0.9% excluding motor trades.
“This illustrates the impact of the aggressive discounting consumers availed of both pre- and post-Christmas. This discounting continued into January.
“It also shows why retailers are extremely nervous about any talk of wage increases in the absence of a broad-based recovery in the domestic economy.”
Mr Murphy said the figures show that there is no room for complacency regarding a perceived improvement in consumer confidence.
“Retailers continue to face challenges despite improvements in the economy and consumer confidence,” said Thomas Burke of Retail Ireland. “We must address the issues of unsustainably high rents and disproportionate local authority commercial rates if we are to achieve balanced regional growth.
“More also needs to be done to make town and city centres better places to visit and shop.”