Outlook for retailers 'dire' after disastrous sales period
SHOPPERS remain reluctant to part with their cash, with retailers yesterday confirming yet another disastrous sales period.
Garden centres and menswear were among the few areas to buck the falling sales trend in the last three months of 2011 as consumers reined in spending, with even grocery sales down 1.7pc.
While December was the first month in more than three years to see a like-for-like growth in sales -- up 1.8pc on a year earlier -- Retail Excellence Ireland (REI) said this was largely due to the record snowfalls the previous year which impacted severely on sales.
And its Irish Retail Industry Performance Review found last November was the 45th consecutive month to witness a decline in sales.
The worst performing sectors were furniture and flooring and jewellery which, when compared to the same quarter a year earlier, were down 5.7pc and 4.7pc respectively.
However, garden centres saw a reversal in their fortunes with sales up 4.75pc in the final quarter of last year compared to the same period in 2010.
As well as a fall in the volume of retail sales, the value also declined with an average reduction of just under 5pc across all sectors. REI said this was driven by promotional activity among retailers.
David Fitzsimons, chief executive of REI, said the medium-term outlook for retailers was "dire" and raised the prospect of the Government having to call a mini-Budget in April or May due to falling VAT returns.
"The forecast in terms of consumer taxes, primarily VAT, is going to fall substantially short of the mark," he said.
"To put 2pc on VAT and hope demand will remain the same is naive," he added.
He said a host of well-known names were in trouble or had closed their doors and more were considering following them in the months ahead.