Irish retailers are expecting sales to dip when the hospitality sector opens on a wider scale next month, mirroring a similar trend currently visible in the UK.
Latest industry figures from Britain show UK retail sales fell, unexpectedly, in May, as the reopening of restaurants and bars prompted consumers to cut spending at supermarkets.
“Following a sharp increase last month coinciding with post-lockdown reopening, retail sales dipped slightly in May,” Darren Morgan, director of economic statistics at Britain’s Office for National Statistics, said.
“However, they remain well above both their pre-pandemic levels and those seen in March before shops reopened,” he said.
Most recent Irish figures, from the CSO, showed a 7.4% monthly increase in retail sales volumes in April and a 7.1% rise versus the same month in 2019.
That was largely boosted by online sales during locdown. A further increase is expected in the next tranche of CSO data, which will include May when non-essential retailers were allowed to fully reopen here.
However, retail groups are expecting to see some plateauing in sales volumes in the coming months — especially in areas like food and grocery shopping as more people opt to benefit from the chance to eat out more regularly.
“Retail will, inevitably, take a bit of a dip — maybe, also, a little in the non-food retail area — as people have more options over how to spend their money,” said Retail Excellence chief executive Duncan Graham.
Mr Graham said he expects the positive effects of pent-up consumer demand and savings to remain evident across the summer months, but that some level of plateauing is inevitable.
He said the third quarter of the year, when summer melds into early autumn, will be key to gauging whether the economy is continuing on an upward curve.
Online sales declined for a third month as physical stores reopened but remain 60% higher than in February 2020 before the pandemic hit the UK.
Hospitality businesses were allowed to serve to customers outside from mid-April and indoors from May 17.
However, the figures will do little to shift the impression that the UK is bouncing back strongly from its worst slump in three centuries.
The recovery — like here and elsewhere — is being powered by consumers, who built up huge savings in the absence of opportunities to spend while much of the economy was closed.
The CBI, the nation’s biggest business lobby group, revised up its forecasts for growth this year to 8.2% from 6% and expects a 6.1% expansion in 2022, quicker than the pace predicted by the UK government’s office for budget responsibility.
“There are really positive signs about the economic recovery ahead this year and next,” said CBI director-general Tony Danker.
“The data clearly indicates that there is pent up demand and ambition across many sectors,” he said.