Duncan Graham: Retailers report some Christmas sales cheer
A busy St. Patrick's Street in Cork in the build-up to Christmas. Picture: Denis Minihane
Retailers could be forgiven for looking back at 2022 with some degree of frustration. It seems like no sooner had we emerged from Covid restrictions than the industry was hit by a sharply deteriorating cost of living crisis which hit all areas of the economy.
This fall in discretionary income means that consumers are shopping with value in mind and are conscious of what they are spending their hard-earned money on.
Retailers will not have appreciated the particularly cold weather in mid-December: The associated weather warnings saw people put off shopping trips and also impacted on late-night shopping during what is a critical time for businesses.
This time of the year is the 'golden quarter’ for retailers. Despite cost pressures and inclement weather, footfall in towns and shopping centres is ahead of the previous two years as people savour a return to some semblance of normality, and it is no surprise that online sales have fallen back from their pandemic highs.
Festive goods have been selling earlier as shoppers looked to budget for Christmas over a period of months rather than weeks.
The feedback is mixed from various sectors, however. Clothing retailers are reporting strong growth in partywear with the return of the Christmas party season, but with leisurewear sales down. Womenswear and footwear are selling well, and jewellery stores have reported good sales.
Meanwhile, the garden and agri-retail sectors are having a challenging December, with our members reporting a 4% to 16% drop in like-for-like sales. Furniture and homeware sales are down on Covid peaks, while café and food sales are still on pre-pandemic levels as many people still work remotely.
The year ahead brings challenges that need to be addressed for retailers to survive and thrive. The recruitment and retention of staff is an ongoing problem, but ongoing supports are needed to absorb increasing labour costs such as statutory sick pay and pension auto-enrolment.
The Temporary Business Energy Support Scheme is welcome but is only now beginning to pay out to retailers, three months after it was first announced. Government supports for energy need to be extended until at least until the middle of 2023.
Last year, we argued that we needed to see initiatives from city councils and Government to get people back to our cities — not only to shop but also to live, work and socialise, but progress has been slow in this area.
The move to sustainable retailing is here to stay. Retailers need to become more carbon-neutral in order to satisfy consumer demand, but this costs money and meaningful grants need to be implemented.
The Online Retail Scheme that was initiated during the pandemic was a real boost, but the scheme needs to be broadened to more retailers. This has been a real challenge for smaller retailers employing fewer than 10 people.
Despite all the pressures the industry is facing, it is obvious that Irish retail is operating at a world-class level.
It is this world-class standard which will continue to see Irish retail thrive as we emerge from a particularly challenging period.
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