| 17°C Dublin

Retail sector stuck in slump after washout summer

UNEXPECTEDLY poor summer weather and growing consumer fears on the coming Budget prevented Irish retailing from breaking out of its long-running downward spiral in the third-quarter of this year, with the latest sales figures showing a fall of 1pc compared with Q3 last year.

The statistics from Retail Excellence Ireland (REI) show that computer and related sales fell hardest, down 20pc on the previous Q3, followed by garden centre (down 8.5pc) and photo/cameras (down 7.1pc).

Sectors hit by a flat property market continued to slump with home and giftware down 5.6pc and furniture and flooring sinking by 4.3pc. Ladies fashion fell by 3.2pc. Both it and the gardening sector were hit by the washout summer weather.

"Most worrying for us is that July was the better of the three months while a downward trend continued right through to September -- the worst month of the quarter with a fall of 1.5pc recorded," says the REI's chief executive David Fitzsimons.

Retailers now fear that December's Budget, which many believe will be the toughest so far, is set to impact more on the Christmas market than any of its predecessors.

"The closer that this year's Budget gets, the greater its impact on consumer sentiment and so we are particularly concerned for Q4.

"We're already seeing the sort of kite-flying nonsense by Government which gets people worried and stops them spending.

"The timing of the Budget just before Christmas -- a season in which many retailers achieve up to one-third of their annual sales -- continues to be hugely damaging."

There was some good news, however, with certain sectors trading remarkably well in the quarter.

Brown goods (consumer electronics) experienced an unusual 16pc boost based on the switch over to digital. Small home appliances were up 11pc; hot beverage, which includes fast food and coffee; went up 2.3pc, menswear was up 1.2pc; grocery was up 1.1pc and pharmacy rose by 1pc.

Although Q3 2012 recorded the 14th consecutive fall in trading, the 1pc slippage was among the lowest recorded since the recession began.

The REI believes that a return to overall growth should be reached by the middle of next year.

The Retail Excellence Ireland Quarterly Productivity Review aggregates and analyses data from over 4,500 retail stores in Ireland.

Irish Independent