‘Disappointing’ sales miss summer bounce

By Eamon Quinn

The good weather failed to deliver the expected bounce in sales at the shops last month but spending was nonetheless significantly higher than a year earlier, according to official figures.

The CSO said sales surged, in volume terms, by 6.5% in July from June, and were up 5.5% from a year earlier. Stripping out the effects of new car 182 sales, which are heavily concentrated in July, sales by volume fell 0.5% in the month even though they were up 2.9% from a year earlier.

Davy said the figures were “a little disappointing”.

“Not surprisingly, today’s retail sales data showed volumes up 6.5% in July following a 1.5% fall in June. This volatility merely reflects the impact of the 182 car registration plate, not fully accounted for in the CSO’s seasonal adjustment,” said the stockbroker.

“Excluding car sales, the retail sales data were a little disappointing — falling 0.5% on the month albeit still up 2.9% on the year. However, this decline in retail sales is probably a blip, not least given Ireland’s robust labour market performance.”

Measured by value of retail sales — which excludes discounting effects and strip out the new car sales — underlying retail sales fell by 0.6% from June but were up 2.6% in the year.

Ahead of October’s budget, Government officials will be monitoring any signs of weakness in sales and the stability of Vat revenues.

The retail sales figures and Government Vat receipts this year show a picture of a consumer spending more but not at any spectacular rate. Consumer prices, benefiting from sterling weakness, are rising overall but at a slow pace.

The exchequer returns for last month showed Vat revenues, at €2.09bn, brought in 4% more than was anticipated and were on target over the full seven months.

The CSO figures show sales of electrical goods were up over 22% in the year; motor sales were up by over 10%; and books, newspapers, and stationery, were up 9.9% to become the largest winners in July.

“Retail sales remain erratic on a monthly basis and are still swinging back and forth, but the underlying trend is positive,” said Merrion chief economist Alan McQuaid.

“Even with the fluctuation in consumer sentiment, overall personal spending has been positive in the past couple of years, boosted by the increase in the numbers employed in the country,” he said, despite the slump in sterling enticing shoppers to spend in the North.

Separately, supermarket figures showed a steady upturn in grocery spending, by 2.6%, in the year, according to researcher Kantar Worldpanel Ireland.

Some €2.426bn was spent in the 12 weeks through August 18 in supermarkets, compared with €2.364bn a year earlier. Prices across the 30,000 products monitored by Kantar fell by an annual rate of over 0.5% over the period.

Of the €2.426bn, Tesco had the largest share at 22.4%, after it posted another large growth spurt in the period. It was ahead of SuperValu on 22%, and Dunnes with a 20.9% share. In fourth, Lidl had a share of 11.9%, but Aldi closed some of the gap with its direct rival, with a share of 11.5%.

Douglas Faughnan at Kantar said Musgrave, owner of SuperValu and Centra, grew outside its Munster base, helped by “its prominent sponsorship of the GAA All-Ireland Hurling and Football Championships”.