Saturday 24 February 2018

Car scrappage props up retail sales

Edel O'Connell

A MODEST growth in retail sales last month would not have happened without help from the car scrappage scheme -- which ends today.

Latest data from the CSO reveals retail sales increased in May by 1.3pc, reversing a series of monthly declines.

However, despite the increase, the figures suggest overall retail activity remains sluggish, with the volume of sales falling by 2.1pc in the year to May.

The May increase was largely bolstered by car sales, which were up by 13pc.

However, excluding those sales, which were influenced by the scrappage scheme that ends today, overall sales would have fallen by 0.6pc on the month.

There was a significant decline in the annual volume of sales of hardware, paint and glass which were down by 13.9pc; and fuel sales, which were down by 9.9pc.

Bar sales dropped by more than 8pc in May.

Aside from the motor trade, the only other category to show a year-on-year increase was electrical goods, which increased by 2.9pc.

The car scrappage scheme offered motorists €1,500 off new, low-emissions cars if they scrapped their own cars that were aged 10 years or older.

The scheme was initially meant to expire in December last year, but it was extended in a modified form until this month.

More than 12,000 cars have been sold as part of the scheme this year, with more than 29,000 sold during the whole initiative.

Meanwhile retailers hope the reduction in the VAT rate on tourism-related goods and services will offer a boost from next month.

The rate is to be reduced from 13.5 per cent to 9pc as of tomorrow.

The cut is part of a package of job incentives announced by Finance Minister Michael Noonan last month.

Irish Independent

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