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Wednesday 17 September 2014

Increased spending at garden centres shows green shoots of recovery in retail

Published 08/06/2014 | 02:30

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RISH consumers would have a hole in their shoe rather than give up on spending on home improvements, a nice garden and the latest big-ticket kitchen and household appliances. An analysis of retail sales shows that Irish shoppers have begun to spend again – but they are being increasingly selective about their priorities.

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Men may be content to wear last year's work and leisurewear, but women are still investing in fashion. Households are increasingly canny about where to buy their food and basic provisions, alternating between supermarkets in search of the best bargains.

And there are signs that spending on leisure including restaurants and pubs is beginning to rise – albeit at modest rates.

Generally, retail had a difficult first quarter. Sales and volumes rose only modestly but some sectors did perform well.

GARDEN CENTRES:

After the Bloom festival in the Phoenix Park over the bank holiday, event organisers say some €5m in sales will be generated by the event. But householders have consistently increased spending at garden centres in recent months, a phenomenon that bucked the trend in many other sectors of 'non-essential' retail. That has been put down to the stagnation in the property market, which means that it is easier to improve the home and garden you have, rather than move. In the first quarter of 2014, garden centres reported a whopping 9.57 per cent rise in sales compared with the same period last year, according to a sales review carried out by Retail Excellence Ireland.

FURNITURE AND FLOORING:

Another sector that has risen significantly – up a healthy 4.82 per cent in the first three months of this year, compared with the corresponding period last year. Analysts suggest that a government tax break gave the sector a significant boost. The Home Renovation Incentive Scheme relates to work done on main family homes between October 25 last year and the end of next year. Homeowners can get significant tax relief if they spend between €5,000 and €30,000 on home-renovation programmes if the work is carried out by fully tax-compliant contractors and suppliers.

SMALL HOME APPLIANCES:

Along with garden centres, sales of kitchen gadgets and other small household appliances performed best in the retail sector in the first quarter – up 9.6 per cent on the first quarter of 2013. Significant discounting during the January sales may have contributed to the bounce but some retailers say that the increase in sales is due to householders who put off purchases in the last couple of years realising that their existing appliances had now come to the end of their useful life. Anthony Williams, Home Appliance Account Director of market research giant GfK, says the new year began with high demand for higher-end food-preparation and personal-care products. Sales of items like coffee makers and vacuum cleaners surged but the volume of sales of items like toasters, kettles and irons lagged behind.

MAJOR HOUSEHOLD APPLIANCES:

Sales of washing machines, tumble driers and refrigerators and other big-ticket items rose 5.7 per cent in the first three months but that comes after a very poor performance in 2013 overall. The retailers responded by a raft of major sales promotions and heavy discounting in the new year sales. The result was a healthy volume of sales at the beginning of this year, though sales were more modest ahead of the Easter break.

FASHION:

Few areas of retail have suffered more since the crash than the rag trade. But ladies' fashions did show a 5.74 per cent increase in Q1 this year, albeit from a low base. Men are still reluctant to spend. Even with sales offers in the post-Christmas period, sales of menswear showed only a modest increase of 1.72 per cent.

OTHERS:

Footwear, down 3.4pc; gift and homeware, down 0.56pc; hot beverages, up 5.76pc; jewellery, up 2.2pc; pharmacy, down 4.2pc; consumer electronics, down 1pc; camera sales, down 26pc; IT and computing, down 24pc. (Q1 2014, compared with Q1 2013). Source REI.

Sunday Independent

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