CONSUMERS are spending less but getting more for their money, new figures show.
The volume of retail sales jumped by 3.5% in the year to May, but the value of sales, which measures prices, was down 0.1%, according to the Central Statistics Office (CSO).
Sales at department stores climbed 7.4% in May while clothes sales jumped 13.2%.
The annual rise in retail spending in recent months is due in a large part to strong new car sales, with annual growth of almost 22% recorded in the sector in May. Excluding car sales the volume of retail sales was up 0.1% in the year.
Retail Excellence Ireland, which represents many of the country’s retailers, said, however, that the industry is “far from out of the woods”.
Chief executive of REI, David Fitzsimons, said the figures represent “very modest recovery”, but REI members are “nonetheless hopeful that the improving consumer sentiment will give rise to stronger growth in the second half of 2010”.
The most significant year-on-year sales increases were in furniture and lighting (up 19.5%), clothing, footwear and textiles (up 13.2%), department stores (up 7.4%) and hardware, paints and glass (up 6.5%).
Ulster Bank chief economist Simon Barry said the data provides more evidence of ongoing, if gradual, improvement in underlying spending trends.
“In particular, they provide a solid basis for expecting a positive second quarter for total consumer spending,” he said.
Chief economist with Bloxham Stockbrokers, Alan McQuaid said the latest figures are an indication that “things are improving on the economic front”.
“Although we still have some way to go on the road to recovery, the risks in our view are now tilted to the upside, notwithstanding the current Eurozone ‘debt’ crisis which has embroiled Euroland’s ‘peripheral’ countries, including Ireland.
“Indeed, the indications are now that both consumer spending and GDP will post positive annual changes for 2010 as a whole,” he said.
The annual increase in the volume of headline retail sales in February was the first recorded since January 2008, and the March, April and May figures have carried that trend on.
“There now appears to be a general feeling out there that Ireland is over the worst and the economy is on the road to recovery. This is now being reflected in reduced savings and increased spending. A strong sterling exchange rate against the euro is also helping to reduce the numbers from the Republic crossing the border into Northern Ireland to do their shopping,” said Mr McQuaid.
Mr Fitzsimons also criticised recent claims of reduced retail rent, saying the reports exclusively pertain to new leases.
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