Retail sales fall but purchasing power is set to increase this year

Meanwhile, the value of retail sales also fell by 1.4% in the month and rose by 0.2% in the 12 months to June.

Retail sales slumped in June despite cooling inflation as shoppers spent less on clothing and pubs as some cost pressures linger and schools break for the summer.

Figures from the Central Statistics Office (CSO) showed the volume of retail sales fell 1.2% last month compared to May and declined by almost 1.8% in annual terms.

However, when car sales are stripped out from the overall sales volume, retail sales fell marginally by 0.4% in the month and 2% compared to June last year, suggesting ongoing volatility in motor trades as the price war between electric car makers and EU tariffs take their toll.

Irish inflation has cooled significantly from highs recorded in 2022 and hovers below the 2% mark but some consumers continue to feel the pinch as separate figures from the utilities and banking regulators showed some households are falling behind on energy and mortgage payments.

Analysts have predicted purchasing power will improve amid a strongly performing labour market and rising wages that will no-longer be playing catch up to inflation, which may lead to an improvement in consumption among shoppers.

At the European Central Bank’s last monetary policy meeting in June, president Christine Lagarde indicated that increased and sustainable levels of consumption across eurozone economies will lead to recovery and subsequent interest rate reductions.

Meanwhile, the value of retail sales also fell by 1.4% in the month and rose by 0.2% in the 12 months to June.