Tuesday 17 October 2017

High rents, recession and record rainfall hit struggling retailers

Allison Bray

Allison Bray

CSO figures show year-on-year sales plummet 5.5pc with a 0.7pc drop in June

RECORD-breaking rain added to the woes of retailers last month, whose year-on-year sales volumes fell to the lowest level since December 2009.

Figures from the Central Statistics Office (CSO) released yesterday reveal that retail sales plummeted by 5.5pc between this June and last and overall retail sales volumes in June dropped by 0.7pc.

The recession, combined with other factors such as high commercial rents and rates, is continuing to batter the retail sector, according to the Irish Small and Medium Enterprises Association (ISME).

But the record rainfalls and unseasonably cold temperatures last month has only compounded sluggish sales, according to Retail Ireland Director Stephen Lynam.

Diversified

"It is difficult to overstate the devastation felt in the retail sector. Sales have fallen by almost every measure.

"The hardware and garden sector has been particularly badly hit, with a fall of 10.4pc on the foot of a particularly bad summer.

"Furniture, books and clothing are all also well down," Mr Lynam said.

Fergal Doyle, co-owner of the Arboretum Garden Centre in Co Carlow, said the only thing saving his business from double-digit declines this summer was the fact that the centre is diversified with a cafe, pet home and giftware departments along with a traditional garden centre. Even then overall sales were down, he told the Irish Independent.

"The overall footfall is down because of gardening. Core gardening has taken a real thrashing due to the weather."

"We're down by single figures so we're happy with our performance given the weather and customer sentiment," he added.

But other retailers are not so lucky. Food, beverage and tobacco sales were down by almost 10pc (9.7pc) last month followed by hardware sales at close to 5pc (4.9pc) and an overall decline of 2.3pc by other retailers.

Euro 2012 proved to be a temporary boon to publicans, who enjoyed a 2.1pc hike in bar sales last month as well as electrical suppliers, who also saw a 2.9pc increase in sales of products such as flatscreen TVs. But even if the weather picks up, it's unlikely to translate into sales, said economist Alan McQuaid of Merrion Stockbrokers.

"Given the current climate, it is hard to see a major rise in spending in the coming months. Heightened uncertainty about the prospects for future incomes may well persist given the high level of unemployment such that consumers could continue to maintain buffers to protect against adverse income shocks," he said.

ISME chief executive Mark Fielding said approximately 25,000 jobs in the retail sector could be lost if the current trend continues.

"The golden answer to all of this is jobs, but there's very little happening," he said.

ISME is urging the Government to establish a retail sector task force to address issues affecting the industry, while Chambers Ireland is also calling for measures in the December Budget to "strengthen the retail sector and increase consumer spending".

Irish Independent

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