Retail stores under strain

Retail sales increased strongly in both money and value terms in July as motor sales surged, but many other businesses are still struggling and selling much less than before the crash.

Retail sales are increasingly under the spotlight as consumer demand is expected to take the strain of driving the economic recovery at a time Irish exports face tougher challenges following the UK’s decision to quit the EU.

CSO figures showed that measured by value and volume, retail sales rose 3.9% and 6.3% from July 2015 — with sales of motor cars surging in the year because of the July registrations.

Excluding car sales, sales growth, however, was much less impressive, rising by 0.8% and 2.7% in value and volume terms.

Breaking down the figures across 13 types of stores and businesses, the volume of motor sales rose 15% from July 2015.

Furniture and lighting stores said their sales were up 6.5% in the year in volume terms, and sales of hardware and paints and glass posted an annual increase of almost 5%.

Electrical goods outlets said sales increased by 4.3% in the year, while sales in general food and grocery stores crept higher in July and were up over 3% in the year.

Sales of stores selling books, newspapers and stationery fell 1% from July 2015.

The figures also suggest only a handful of retail businesses have recovered to match the sales levels posted before the crash, 11 years ago.

The CSO figures show food and grocery stores are doing best with sales in both value and volume terms having climbed about 30% since ‘05.

Pharmacies in value terms have recovered to match 2005 levels, and are selling about 13% more goods by volume over the same period. Bar sales in value and volume terms are about 18% and 30% lower than in 2005.

Despite the recent recovery, retail businesses are facing low margins and cost pressures, said Mark Fielding, chief executive at the Irish Small and Medium Enterprises industry group.

He said the CSO figures showed sales were running “well below pre-crash levels”.

“In addition, the devaluation of sterling will have a very negative impact on retailers in the border counties and undermine the hard work done by many retailers over the last eight years.

"Government must realise that our competitiveness is the key to our success,” Mr Fielding said.