Retail sales 'dampened' as first wave of water bills wash through letterboxes
Retail sales fell in May as water bills came through consumers' letterboxes. Retail sales, which were still well up on last year, fell by 2.5pc in May compared to April and were down by 2pc when car sales were excluded.
The annual sales growth rate decreased from 7.8pc to 5.5pc. Food, beverages, tobacco and hardware listed among the biggest fallers.
There was also a decrease of 2.6pc in the value of retail sales last month when compared with April 2015 and there was an annual increase of 4.3pc when compared with May 2014.
However sales volumes were up 7.4pc on an annual basis, down from growth of 12pc the previous month, which had been the fastest annual growth since the financial crisis.
The sectors with the largest month-on-month volume increases were books, newspapers and stationery, which rose 7.6pc, and electrical goods which rose 3.2 pc.
Goodbody stockbrokers said it was "unsurprising" to see some of the strength in retail sales ease in May, following the surge in volumes seen in April.
A research note published by the company said: "We expect consumer spending to increase by 2.6pc this year, supported by positive trends in the labour market and the wider economy, although the recent strength in retail sales poses an upside risk to this."
One reason given for the relative decrease in spending was the first bills from Irish Water.
Investec economist Philip O'Sullivan said: "The sharp month on month decline is a little surprising given that the (unadjusted) consumer confidence index was effectively flat last month.
"It is possible that the receipt of maiden bills from the new utility, Irish Water, may have served to dampen household spending."