Strong retail sales on back of discounts
Almost all retail sectors are enjoying strong sales growth, but for most this is coming at the expense of discounted prices, a report claims.
Bars are an exception, however, with both volume sales and average prices rising, according to the study from Savills.
"While sales volumes are up by one third since January 2013, deflation has been a consistent theme across Irish retail for nearly five years," said John McCartney, director of research at Savills Ireland.
"In fact, in eight out of 10 sectors where prices are falling, the extent of discounting has deepened over the last 24 months. One reason is an ongoing compositional shift in the Irish retail landscape towards mid-market and value offerings such as Penneys and the discount supermarkets.
"It also reflects lower input costs for retailers due to lower oil prices since mid-2013 and, more recently, weak sterling."
The report noted that retail sales growth slowed to 3pc in the first half of this year. "However, this slowdown was almost entirely due to a leakage of motor sales to the UK, with consumers taking advantage of the more favourable EUR/GBP exchange rate," it noted.
Furniture stores continue to enjoy the most rapid growth in volume sales. This, the report said, reflects improved disposable incomes, a strong trend in household formations, sharply rising house prices and the introduction of the Government-sponsored Home Renovation Incentive - the latter of which has encouraged people to invest more in their homes.
Overall, the Savills report said the outlook is positive.
"Despite some external headwinds, we are continuing to see international brands enter Ireland with more waiting in the wings."