Retail volume sales fell by 1.5% in February this year compared to the previous month, according to new Central Statistics Office (CSO) data. However, on an annual basis, retail sales were 5% higher than February last year.
Excluding motor sales, retail sales fell 0.4% in February from January, but were up 2.3% on a yearly basis. Food, beverages and tobacco sales in particular declined by 1.9%. Data for January showed retail sales had risen 1.9% on a monthly basis and by 9.4% on an annual basis.
Stephen Lynam, director at Retail Ireland, says its not all doom and gloom as the numbers actually show a small increase compared to last February (0.2%, excluding motor trades and bars), however, “the situation remains very fragile.” He added, “The Government must ensure more is done to instill consumer confidence in the economy and confidence to spend. That is the only way to sustainable, prolonged recovery.”
Merrion economist Alan McQuaid told RTE news that the main factor impacting negatively on consumer demand has been the continued net decline in real disposable incomes, an increasing tax burden and an erosion of transfer income. "As well as that," he said, "the personal savings rate has remained elevated as households have striven to reduce their high level of indebtedness and to adjust to a sharp fall in personal wealth."
Consumer sentiment in February reached the highest levels since May 2007, which McQuaid said is being reflected in stronger personal spending.
Investec economist Philip O'Sullivan told RTE News that while it is comforting that there has been a broad-based pick-up in retail sales volumes, that discounting remains an impeding factor and shows that the economy is still fragile. However, he also said that "for 2014 as a whole we see an upturn in consumer spending, aided by continued growth in payrolls and the surge in consumer confidence.”
© 2014 - Checkout Magazine by Genna Patterson