Wednesday 22 November 2017

Crippling cost of education blamed for new sales slump

Charlie Weston Personal Finance Editor

THE crippling costs of preparing children for school and college was blamed yesterday for a new sales slump.

Figures showed sales of retail goods dropped sharply in September as under-pressure parents called a halt to what little discretionary spending they were doing.

Retailers said the sector was in crisis after sales dived by close to 4pc in September when compared with a year ago. It was the biggest annual drop since April.

September sales were down close to 1pc when compared with the previous month.

The figures from the Central Statistics Office also showed sales of electrical goods were one of the few items to show growth.

But this is thought to be mainly due to people being forced to replace the likes of fridges and washing machines as they get too old to service.

David Fitzsimons, chief executive of Retail Excellence Ireland, said households were so busy buying schoolbooks and bags that they had no money left for anything else.

"September was back-to-school and college month and this placed significant financial pressure on a large number of households, resulting in many other discretionary sectors suffering," he said.

Mr Fitzsimons said that September was the 43rd month of consecutive decreases in retail sales.

"Continued uncertainty over the euro crisis and further job losses helped keep consumer confidence at record low levels," he added.

Sales of furniture and lighting have collapsed by almost 12pc over the past year, with paint and glass sales also crashing. Food sales dropped sharply during September, as did bar sales.

Other big declines were recorded for books, pharmaceuticals, cosmetics, clothing, footwear and fuel.

The figures show that sales in the motor sector fell by 3.4pc during September. Sales in the sector have been falling since the scrappage scheme finished at the end of June.

Small firms lobby group ISME said retailers were being "wiped out" the length and breadth of the country due to a deteriorating domestic economy. The economy was floundering because of consumer uncertainty and ever-increasing costs.

Meanwhile, households have intensified their efforts to ditch their debts. Consumers have slashed €231m off their credit card bills in the past year, with more than 112,000 personal credit card accounts shut in the past 12 months, according to the Central Bank.

The bank said loans to households were down 4pc compared with the same month last year.

The slowdown in lending in September was driven by a decline of €83m in loans for house purchases, and a decline of €119m in loans for consumption purposes.

Lending for other purposes increased by €19m.

Irish Independent

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