Retail Ireland Heightens Concern After Disappointing Christmas
Published on Feb 7 2017 10:33 AM
Retailers in Ireland saw a worrying downturn in performance during the second half of 2016, according to a new report from Retail Ireland, the Ibec group that represents the sector. In its latest Retail Monitor, published yesterday (6 February), the group said softening consumer sentiment and a further move towards online shopping resulted in the weak results, particularly over the crucial Christmas period.
Retail Ireland Director Thomas Burke said: “There were disappointing results across the board over the Christmas trading period, with some retail categories coming under particular pressure. Total sales fell by 0.1 per cent when compared with the festive season the previous year.
“There are a number of reasons behind this. A weaker sterling has resulted in shoppers increasingly turning to UK online retailers, with a larger number of consumers also crossing the border to shop. Consumer confidence, on which the the retail sector is so reliant, has dipped significantly over recent months, partly due to Brexit concerns.
“This was particularly evident over Christmas, where sales were far below expected levels. Many retailers reported only marginal growth, or in some cases a decline on Christmas 2015,” said Burke.
He added, “There was a notable reduction in the pace of retail sales growth during the entire second half of last year, down from 3% in the period January to June, to 1% in the July to December period.”
Burke called on the Government to take action on the matter: “While domestic retailers are moving quickly to adapt to the new environment, Government must aid them by taking urgent and decisive steps to address the high cost of doing business, particularly labour taxes, insurance, and rates. They need to ensure that domestic retailers are not at a competitive disadvantage to online and other markets.
“The Irish retail sector is going through a period of significant structural change, which has been accelerated by the impact of external political and economic factors. Retail was the last sector of the economy to enter a recovery phase after the downturn and remains well below its pre crash peak.
“Retailers require additional support from Government over the coming months to sustain and grow the 275,000 jobs they provide in every city, town and village in the country.”
Key retail trends set out in the Retail Ireland Monitor include a levelling off in growth for service stations in Q4 2016, although double digit growth was recorded in the areas of food, coffee and impulse within forecourt convenience. Department stores had a disappointing Q4 overall, due to the reasons laid out by Burke. Supermarkets received steady growth over the last quarter of 2016, with promotions playing a particularly significant part in volume growth during the Christmas period.
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