Caution urged on growth in retail sales

Retail Excellence Ireland has warned against over-exuberance regarding recovering consumer spend figures, despite 4% year-on-year growth evident in the first three months of the year.

“The first quarter of 2015 proved a relatively positive quarter which started well with like-for-like gains of 4.37% in January, mainly a function of today’s consumer tendency to postpone spending into the sales period.

“A significant concern is the fact that the quarter weakened over the three months, ending with gains of just 2.43% in March,” said Sean Murphy, deputy chief executive.

“While we have arrived at a point in the economic cycle where like-for-like gains are becoming the norm, caution is required on the part of government as the potential for a return to negative growth cannot be ignored. This is why the retail industry is and remains very concerned at the prospect of any cost increases,” he said.

“Retail still has not come close to achieving activity levels seen in the last decade, yet many of the higher costs in upwards-only rents, high local-authority charges and the national minimum wage were ‘locked in’ at that time and have remained in place for the most part,” he said.

Good first quarter gains were noted in clothing sales and those of small home applicances; while recovery was seen in pharmaceutical product sales and the IT market.

“Consumer electronics showed a positive value growth of +3%. However, this positivity was restricted to January only, as February and March saw small value declines,” said Mr Murphy.