Festive shop splurge fails to boost grim retail figures
Published 19/01/2010 | 05:00
THE traditional pre-Christmas rush had little impact on retail sales which continue to lag badly, figures revealed yesterday.
And a separate study confirmed that more people switched to north of the Border to do their shopping last year.
The Central Statistics Office (CSO) found the slump in sales of household goods and the fall-off in pub sales persisted in November, with apprehension about the Budget ensuring consumers kept their money in their pockets.
The latest figures show the volume of retail sales fell by 8.2pc compared with the same time in 2008.
On a more positive note, the declines of more than 26pc seen at the start of last year were not repeated, but while the continued fall-off is resulting in better prices for consumers, it is also impacting on smaller retailers.
"Sales fell in 10 of the 11 months in 2009 for which we now have data," said Rossa White of Davy Stockbrokers.
"We do think that larger retailers had exceptionally fat margins heading into the recession, but the independent sector may well be struggling to cope. Rents were negotiated in many cases based on a revenue trend that is now unrealistic."
However, some economists believe there is light at the end of the tunnel for smaller traders.
"The Budget changes of a cut in excise duty on alcohol, the introduction of the car scrappage scheme, and the reversal of the previous year's half percentage point hike in the standard rate of VAT should, in our opinion, boost overall consumer expenditure in 2010, despite the likely negative impact on spending from the reduction in public sector wages and the cut in some social welfare allowances," said Alan McQuaid of Bloxham Stockbrokers.
"As well as that, the fact income taxes weren't increased further should raise the spirits of the majority of consumers. Still, we expect another fall in personal spending in 2010.
"Taking the latest developments into account, we are now forecasting an overall drop in spending on goods and services this year of 1.8pc as against a projected fall of 7.3pc in 2009.
Yesterday's figures for November showed motor industry sales rose by 3.5pc in the month but were still 24.5pc lower than the same month in 2008.
Sales in sectors linked to the construction industry continued to see big declines, with furniture sales, for example, down almost 15pc.
Bar sales were also weaker, falling by 12pc on an annual basis, while sales in department stores slumped 11pc despite the proximity of Christmas.
Simon Barry of Ulster Bank said the November CSO report "is painting a picture of a much more stable Irish consumer".
Meanwhile, a separate report released yesterday found footfall in Irish shops fell by more than 7pc in the last quarter of 2009. But the figures, from information services company Experian, confirmed that while it was a difficult period for retailers in the south, footfall in the North improved slightly.
This will add to the evidence that shoppers are increasingly crossing the border to take advantage of better pricing. Overall, footfall in Irish shops fell by 5.7pc in 2009, when compared with 2008. In the North, it rose by 3.3pc on 2008.