Call to move budget from December slot
According to Mary Lambkin — professor of marketing at UCD’s Smurfit Business School, the timing of the budget is having an additional negative effect on consumer confidence.
“The retail sector, already in a weak state, relies on the three months running up to Christmas for about 40% of their annual sales. While the retail sector saw a slight boost in the third quarter, with sales volume up by 0.5%, overall they have continued to be weak in 2012.
“It seems paradoxical that the budget comes at a time when it can do maximum damage to consumer spending.
“Arguably, it would be better to time it for March, or perhaps October, to avoid clashing with the peak retail season,” she said.
Ms Lambkin was speaking on the back of the publication of the third-quarter consumer market monitor — jointly produced by her school and the Marketing Institute.
The survey found that despite a slight pick-up in spending in the first half of this year, the downward trend returned in the third quarter, reflecting “an annual trend whereby confidence falls each autumn as the December budget approaches”.
“If this downward trend in consumer spending continues, we can expect a continuing decline in consumer confidence as we approach Christmas.
“Retail sales account for about 50% of consumer spending and, combined with the looming December budget, this will have a serious knock-on effect for the sector,” she added.
Elsewhere yesterday Retail Excellence Ireland predicted a near 0.5% drop in Christmas trading this year.
Meanwhile, in its pre-budget submission, the Ibec-affiliated Retail Ireland warned that a harsh budget will keep shoppers away from the all-important Christmas season.
“An increase in consumer confidence and a revival of the domestic economy is central to getting the country back on its feet. Not enough has been done by Government to date,” said Retail Ireland director, Stephen Lynam.
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