Wednesday 18 July 2018

Irish retail sales buck the negative UK trends

John Lewis said it will close one supermarket and four convenience stores in the UK. Photo: PA
John Lewis said it will close one supermarket and four convenience stores in the UK. Photo: PA
Gavin McLoughlin

Gavin McLoughlin

Irish retail sales were up 3.7pc in value terms in May, compared to the same period last year. They were down 0.4pc in value compared to April, according to statistics released yesterday by the CSO.

In volume terms, sales were up 0.1pc month-on-month and 4.3pc year-on-year.

The CSO said furniture and lighting, and the pub sector, had seen the biggest month-on-month volume declines. Hardware, paints and glass had the biggest monthly volume increase.

Merrion Capital economist Alan McQuaid said the figures were stronger than expected.

"Retail sales remain erratic on a monthly basis and are still swinging back and forth, but the underlying trend is positive," he said.

"Even with the fluctuation in consumer sentiment, overall personal spending has been positive in the past couple of years, boosted by the increase in the numbers employed in the country.

"This is despite the fact that the weakness in sterling since the June 2016 Brexit referendum has enticed some shoppers to spend in Northern Ireland.

"What happens on the currency and Brexit fronts will be important factors in determining the spending patterns of some consumers in the Republic over the next 12 to 18 months, but we are still expecting to see healthy personal consumption in the Irish economy over the remainder of this year at least - and probably in 2019 as well as things currently stand."

Ireland is bucking the trend seen in the UK, where a number of big retailers have cut jobs or closed shops.

Other retailers, such as electronics retailer Maplin, have collapsed.

Yesterday, UK retailer John Lewis said profits in the first half will be "close to zero" before exceptional items as Brexit undermines consumer confidence and price competition with other UK retailers mounts.

John Lewis said it will close one supermarket and four convenience stores, with additional shutdowns expected.

With the UK's planned departure from the EU less than a year away, consumer confidence will suffer further in the second half, chief financial officer Patrick Lewis said.

The operator of John Lewis department stores and Waitrose supermarkets said it's unable to give a precise annual profit forecast because of economic uncertainty.

It warned of disruption if the country leaves the bloc without an agreement.

Heavy discounting from struggling chains such as House of Fraser and Debenhams is undermining profit at John Lewis because of its commitment to match competitors' pricing.

(Additional reporting Bloomberg)

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