Retail sales continue to reflect fall-out of inflation

Central Statistics Office figures show that retail sales in January rose by a healthy 2.2% from a year earlier, when measured in money or value terms, but barely grew, by only 0.2%, when measured in terms of the volume or quantity of sales, a measure that goes some way to obtaining an underlying picture by taking into account inflation. 

The fall-out from inflation continues to be felt for retail sales across the economy, as the retail losers outnumber the winners at the start of the year even as the pace of price hikes slow. 

Central Statistics Office figures show that retail sales in January rose by a healthy 2.2% from a year earlier, when measured in money or value terms, but barely grew, by only 0.2%, when measured in terms of the volume or quantity of sales, a measure that goes some way to obtaining an underlying picture by taking into account inflation. 

There were eight losers and five winners across the 13 types of retail business that the CSO regularly tracks for retail sales in January, in terms of the volume of retail sales. Department stores, hardware shops, pubs and bars, furniture stores, and petrol forecourts were among the eight retail sectors to post annual declines in volume sales in January, according to the CSO figures. 

Sales at department stores fell sharply, by over 10%, hardware store sales were down by over 8%, and bar sales were also down by 7.5% in volume terms compared with January 2023. 

Electrical goods, clothing stores, supermarkets, and motor car sales which regularly get an early year bounce, were among the five retail businesses to post annual sales increases in terms of the quantity of goods they sold in the month. 

The latest figures appear to be part of a continuing pattern set last year when volume of retail sales ticked higher in almost every month, despite the sharp rise in consumer prices.

Volume of Retail Sales up 0.5% in January 2024https://t.co/oVDTs3cSnN#CSOIreland #Ireland #RetailSales #Services #Retail #Business #BusinessStatistics #IrishBusiness pic.twitter.com/HtEggYxfJo

— Central Statistics Office Ireland (@CSOIreland) February 28, 2024

The figures also show the huge effects of inflation as shoppers paid significantly more for the same or slightly higher quantity of goods purchased. The 2.2% year-on-year rise in January in terms of the value of retail sales compares with the annual jump of over 8% in value terms posted in January 2023, probably reflecting the slowdown in the pace of inflation. 

The CSO data chimes with the findings of consumer sentiment surveys. The Credit Union Consumer Sentiment Index last month suggested that consumers were anticipating falls in the pace of inflation, but remained wary of the economic outlook nonetheless. 

"The comparatively modest improvement in the buying climate suggests that most consumers will need altogether clearer evidence of a marked improvement in their spending power before they contemplate a sharp step-up in their spending plans," economist Austin Hughes, co-author of the report, wrote at the time. "Our sense is that the recent turnaround in energy costs is a key driver" in consumer sentiment, he said.