Poor summer leads hot drink sales to soften retail decline

The digital switchover and sales of hot drinks in July during yet another “Irish summer” were among the notable exceptions as retail sales continue to fall.

The Irish Retail Industry Performance Review for the third quarter of this year, published by Retail Excellence Ireland, shows sectors such as grocery, pharmacy, and hot beverages enjoyed a “reasonable trading period”, but that the bad summer weather hit areas such as ladies’ fashion and garden centres.

The period from July to September marked the 14th consecutive quarter of sales decline, with September the worst month of the quarter.

Sales last month fell 1.48% year-on-year, with the REI claiming pre-budget speculation was the main reason, dampening consumer sentiment in much the same way that rainfall and cloud did in earlier months.

For the whole of the third quarter, sales were down 1.04% compared with the same period last year.

The worst-performing sectors were IT/computing, down almost 20% in sales compared with the same quarter in 2011. The slump in garden centre sales was more than 8.5% year-on-year, while photo and camera sales were down 7.1%.

Consumer electronics and home appliances were the best-performing areas, while the digital switchover had a positive effect on television sales. Areas hit by falling sales included furniture and flooring, and home and gift ware.

REI chief executive David Fitzsimons said: “It is disappointing that the quarter gradually disimproved, primarily due to Budget 2013 speculation, indicating that a return to growth is less likely than first thought.

“Home-dependent sectors including furniture and flooring and home and giftware continue to suffer due to the lack of a functioning residential property market.

“If matters do not significantly improve in the run-up to Christmas 2012, further failure is assured.”

Not everyone was disappointed, however. Paul Candon, marketing and& corporate services director at Topaz Energy Group, said: “The summer months have shown good growth in the hot beverage category, mainly due to poor weather where customers purchased hot drinks rather than cold. July was the strongest month as it has very mixed weather while August numbers declined as the weather was better.

“September shows growth again as people settle back into more normal routines after the holiday months. Hopefully we see this growth continue through autumn and winter.”