Jewellery sales hike a gem for retailers

The decline in retail sales eased to 5%in the second quarter of the year compared with the same time last year, according to Retail Excellence Ireland (REI) which represents 8,500 stores nationwide.

The figure is disclosed in the organisation’s examination of sales figures for second quarter two of the year.

But it said it was worrying that a month-on-month sales decline actually started to rise again in quarter two, reversing a trend of modified decline which had commenced in February and March.

REI chief executive officer, David Fitzsimons, said predictions made earlier this year about the imminent return of like-to-like growth in the retail industry may have proved to be overly optimistic.

“While it would be alarmist to describe the monthly pattern of rising decline as a ‘double-dip’, the figures proved that the market remained volatile.”

The good news was that the overall decline in sales activity was an improvement on quarter one.

Some sectors actually experienced modest growth, with jewellery and footwear both recording sales spurts at various intervals, although this was not consistent throughout the period.

The grocery and pharmaceutical sectors remained under pressure on the back of aggressive price deflation and weakened sales.

Other positive findings coming out of the report were the fact that wage cost, and rent cost, as a percentage of sales, both decreased.

This proved the point that active intervention in these areas on the part of individual retailers was paying dividends.

“This same kind of intervention is now required by Government to improve consumer sentiment and reduce property costs,” said Mr Fitzsimons. Some of the main findings from the Q2 2010 survey include: Like-for-like sales declined by 2.02% in April, 4.94% in May and 5.47% in June.

Jewellery was the strongest performing sector in the industry and the only one to record overall growth of 0.07%. Footwear also reported improved sales activity with growth of 3.48% in April and 0.34% in May. However, this growth was more than wiped out in June with a sales decline of 12.57%.

As with the past two quarters, menswear continued to be the worst performing retail sector in terms of sales, reporting a 9.37% drop compared with the same period in 2009.

The Grocery sector also continued on its downward trajectory, dropping 7.19% from Q2 2009 but still less than the 11.60% recorded in Q1 this year.

Rent cost as a percentage of sales began to modify in Q2 at 12.47% as opposed to 13.16% this time last year.

Article courtesy of Evening Echo newspaper