Frothy coffees stir up sales as sector grows by 4pc
CAPPUCCINOS and lattes are the frothiest part of the Irish retail industry but even they enjoyed only marginal growth in the final months of last year.
Hot beverages were the best performing sector, growing by over 4pc in the final quarter of 2012 compared with the same period of 2011, new figures from Retail Excellence Ireland (REI) show.
Sales of hot drinks grew steadily every month and weren't hit by the pre-Budget fear factor, which affected most consumer purchases in November.
Coffee prices had not risen, suggesting solid growth with fewer discount offers, said Felim Meade, director of the cafe chain Graham O'Sullivan Ltd.
REI found that overall retail sales were 0.21pc higher in the final three months of 2012 than a year earlier.
Sales were strongest in December as consumers embarked on a post-Budget Christmas shopping spree.
Home and giftware also did well, growing by 2pc, but stores have reported that the sales period after Christmas was disappointing.
And with the property market still in the doldrums, spending on furniture and flooring fell by 2pc.
However, the closures of some shops meant the remaining ones were doing a bit better as their market share grew.
"With the unfortunate closing of competitors as a result of the high cost of operating a retail store, we are finding that markets are stabilising," said Liam Dilleen, owner of EZ Living.
Ladies' fashion and pharmacy sales also declined by 1.3pc each in the period.
REI chief executive David Fitzsimons said the slight upturn in sales was very welcome, but warned that the sector remained fragile.
"It is no surprise that December saw an increase of 0.31pc due to the budget announcements and consumers regaining confidence to spend again," he said.
Many retailers also cut prices in December to generate sales, and consumers had responded to this value.
"We are clearly not out of the woods yet and trading in recent weeks has been reported to be weak," said Mr Fitzsimons.