Cash is king as consumers save rather thanspend
NOBODY disputes that the retail trade has been hammered by the downturn.
The difficulties that beset Clerys and recently saw it acquired by a US investment group, for instance, bear it out. Other retailers have shut up shop, hurt by lower consumer spending, high rates and onerous leases.
With unemployment having soared to nearly 15pc and those lucky enough to still have jobs seeing their pay packets squeezed by higher taxes and lower wages, it's hardly surprising that retail spending is among the first casualties in an economic earthquake. Stark as the figures are, though, it's worth bearing in mind that it's not all doom and gloom. Just look at the employment levels.
Excluding the motor trade, employment in the retail sector climbed 27pc between 1999, when it stood at 141,400, and the first quarter of this year, when it reached 180,100. That's considerably fewer than a peak of around 210,000 touched in 2008, but the sector remains a massive employer. Consumers, however, continue to hoard their cash. They're saving in case they lose their jobs.
They're faced with burdensome fuel costs -- for their cars and their homes -- and budgets that lump them with even more financial headaches. The impending property tax looms next year. Water charges later. It's difficult to see an end.
And that's why cash is king and it stays tucked away under the mattress or, heaven forbid, in a bank in case things get even worse.
But the latest retail sales data from the Central Statistics Office -- for the month of August -- showed that the volume of retail sales actually edged 0.4pc higher.
The increase was underpinned by higher bar and hardware sales. The figures also showed that Irish retail sales were rising faster than the average pace across Europe. CSO data shows that retail sales -- excluding pubs, the motor trade and fuel -- have actually remained reasonably stable this year and are still 5pc above levels recorded for 2005.
But the devil is often in the detail. CSO data also shows that sales at department stores here have risen slightly since 2005. But the value of those sales has plummeted by about 16pc.
The volume of sales of electrical goods has catapulted by about 53pc since 2005, but the value of sales has declined by about 16pc. It's also clear how people are cutting back on car use as the price of a litre of fuel rockets. The value of fuel sales here has risen about 15pc between 2005 and August past. But the volume of fuel sales has fallen off a cliff, by about 29pc in the same period.
With December's Budget promising to blow a chill wind through Christmas shoppers, the retail sector will be bracing for even more turbulence.