It's having the job, not just an income, that spurs consumers
Published 07/05/2015 | 02:30
As we pull clear of our economic troubles, there is no doubt that retail was among the hardest hit sectors during what is now termed 'the great recession'.
Between September 2007 and March 2012, overall employment in Ireland fell by 16pc. As a result 345,000 people lost their incomes and pay levels were hit across the public and private sectors.
In addition, the banking crisis provoked an abrupt withdrawal of consumer credit, while higher taxes, which were necessary to fund the fiscal adjustment, drove a wedge between gross incomes and take-home pay. What these numbers don't capture, however, is the psychological impact of the crisis. At its lowest point, the consumer sentiment index had fallen by 63pc from its peak. Meanwhile, the gross savings ratio rocketed from 3.9pc to 18.1pc as households hoarded what money they had and reduced debt in the face of an uncertain future. All these factors had a profound impact on consumers' spending power.