Retail suffers 'Budget hangover' as sales slump
THE retail sector is still struggling as new figures show that the volume of sales has continued to slump in the past year.
The disappointing figures come just as the economy was showing strong signs of growth.
But the latest number-crunching of the Central Statistics Office shows that the value of retail sales dropped even further, falling by 2.1pc in the year, with the volume of sales also down by 0.9pc.
Concerns about the Budget may have contributed to last month's drop of 0.2pc in sales volumes, but analysts said that at least there was no December budget to dampen the festive spending season as in the past.
The Irish Small and Medium Enterprises Association (ISME) warned that retailers were still struggling and the threatened ESB strike could ruin their vital Christmas trade.
"A strike is likely to drastically decrease pre-Christmas sales in much the same way that the bad weather of 2010 did -- of course the difference is that this impending disaster is manmade and completely avoidable," said ISME boss Mark Fielding.
The figures are disappointing as they are weaker than expected, said Merrion stockbrokers economist Alan McQuaid.
"The most recent consumer sentiment surveys suggest that households are still very nervous about the economic climate and are more willing to save than spend until there is greater clarity," he said.
The homeware sectors saw the biggest boost in sales last month, with furniture and lighting enjoying a 4.9pc boost and electrical goods up 2.6pc.
Sales of books, newspapers and stationery also rose by 2.2pc in October, while clothing and shoes fell by 2.9pc and hardware sales were down 2.1pc.
And the motor trade saw a 4.4pc decrease in business last month, although sales are still 5pc higher than a year ago, suggesting the new six-monthly car number plates boosted sales.
When motor trades are excluded the volume of retail sales is down 1.6pc in the year.
However, there were some encouraging signs as sales in non-specialised stores, mainly supermarkets, were up 0.6pc.
Davy stockbrokers said the fall in retail sales wasn't as bad as it first looked as the early Budget had to be factored in.
"This post-Budget hangover may well extend into November, but, conversely, should give retailers some reprieve in the run-up to the Christmas shopping season," said Davy analyst David McNamara.