Friday 15 February 2019

Retail dips in final quarter as online bites

Retail Excellence figures show tech and fashion had a tough end to 2018, writes Samantha McCaughren

'A decline in hot beverage sales in December by -2.17pc is indicative of footfall erosion principally caused by inclement weather patterns.'
'A decline in hot beverage sales in December by -2.17pc is indicative of footfall erosion principally caused by inclement weather patterns.'

Irish retail sales were fractionally down in the last quarter of 2018, according to lobby group Retail Excellence, with online 'Black Friday' sales and bad weather being blamed for the difficult three months for shops in Ireland.

A number of retail categories did well in the quarter, which is traditionally peak season in the run up to Christmas. Health stores, home and giftware and furniture and flooring were all reported to be up in the Grant Thornton Retail Excellence Irish Retail Industry Productivity Review. Overall, retail was down 0.21pc for the last three months of the year.

Footwear, jewellery, children's wear and ladies fashion were all down for the period. The largest falls were the areas of IT/Computing (down 12pc) and digital cameras (down 29pc).

Retail Excellence CEO David Fitzsimons said: "Quarter 4 proved a challenging one with revenue declines experienced in many sectors of the Irish Retail Industry. November experienced a decline of -0.31pc against November 2017 proving that while Black Friday activity increased significantly, the majority of demand left the country to international websites.

"A decline in hot beverage sales in December by -2.17pc is indicative of footfall erosion principally caused by inclement weather patterns."

A breakdown of the figures show that women's fashion was up 2.5pc in October and flat in December but saw a 7pc decline in November. It finished the quarter down 1.56pc, the review indicates. Grocery sales were up 2.64pc in the quarter and up 3.11pc in December. So-called brown consumer goods, which covers televisions and audio goods, saw growth in the last quarter.

Market research company GfK, which analysed data on appliances and technology said: "It is some time since volume sales enjoyed more growth than their value equivalent, but this was been the case in the last two months of 2018,particularly in November.

"As always the impetus was provided by a minority of products. Voice activation enjoyed a very significant share of audio systems having barely registered a year ago."

A fall in IT and technology sales was not as severe as in November, which included Black Friday, when it was down 7pc compared with 12pc for the quarter. GfK said. "Desktops and notebooks drove this in November, with desktops up 20pc and notebooks up 6.7pc. The biggest winners under notebooks for Q4 were gaming devices, which saw 16.7pc growth in terms of volume." However, there was discounting in the category with the average selling price showing a lower rate of growth,

Data from the Central Statistics Office published earlier this month indicated Irish retail sales volumes slipped 0.1pc in November to leave the annual growth rate at 3.6pc. Excluding car sales, it reported that 'core' retail sales volume increased by 0.2pc compared to the previous month to stand 1.9pc higher on the year.

Sales of electrical goods (up 6.8pc) and in bars (up 4.1pc) - helped the volume of sales grow 0.2pc compared to October of year.

At the time, Merrion Capital economist Alan McQuaid said the figures were weaker than expected, but remained relatively upbeat. "Retail sales continue to remain erratic on a monthly basis and are still swinging back and forth, but the underlying trend is positive.

"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."

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