Not all gloom for retailers as sales show modest rise
Published 27/11/2010 | 05:00
RETAIL sales were better than expected last month, rising by 2pc on last year despite the doom and gloom.
Car sales continued to drive growth as more than 3,000 motorists -- twice as many as last year -- rushed to trade in their old vehicles before the scrappage scheme expires in December.
But the Department of Finance refused to comment on the possibility of extending the scheme into 2011 -- as is being urged by the motor industry to stimulate ongoing sales.
However, a department spokesperson confirmed that stimulus measures were being considered in the Budget, and any measures introduced would be "in the context of contributing to jobs growth".
Retail sales were up in October by 2pc in the year, or 0.5pc compared to the previous month. Cars, clothes, food and department stores were the main areas to see growth, the latest Central Statistics Office figures show. However, even though sales have risen in eight out of 10 months this year, shoppers are still back at 2004 levels of spending.
Furniture, hardware and fuel sales are all still down on last year. The value of purchases is 0.1pc less than last year. But this is a big improvement on the double-digit decreases in spending seen during 2009, meaning stores are no longer having to discount quite so steeply to win customers.
However, if car sales are excluded from the equation, the volume of retail sales is actually 0.5pc lower than this time last year.
Business group Retail Ireland said the reality was that shops were still selling less than a year ago and called for clearer information from the Government on how Budget tax changes would hit consumers.
Ulster Bank economist Lynsey Clemenger said she took some encouragement from the modest rise in retail sales given the backdrop of plummeting consumer confidence last month, which could have put shoppers off. "It is important to point out that even though spending is weak and confidence is fragile, the situation is nowhere near as bad as in the period of unprecedented decline in the first half of 2009," she said.
However, the impact of cutbacks on disposable income would reduce spending power which would keep spending subdued next year, she said.
Tesco, meanwhile, said they would be offering consumers €76m worth of special offers and price cuts between now and Christmas, with weekly half-price deals on toys, decorations, electrical goods and food.