Retail sales rise slightly in January despite inflationary pressures

Retail sales rose fractionally in January, increasing by 0.1 per cent on December, as consumers spent more on clothing, footwear and furniture despite the cost-of-living squeeze. However, spending in bars and department stores declined.

When car sales are stripped out, the volume of retail sales also rose by 0.1 per cent in January.

Sales of furniture and lighting (up 28 per cent), clothing, footwear and textiles (+26.5 per cent) and fuel (+3.4 per cent) experienced the largest increases in the amount bought, according to the latest retail numbers from the Central Statistics Office (CSO).

Conversely, bars (-20.4 per cent), department stores (-5 per cent) and non-specialised stores, which includes supermarkets, (-3.4 per cent) saw the biggest drop in sales during the month.

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In terms of value – the actual money spent – rather than volume, retail sales actually dipped in January by 0.2 per cent on December.

But in a sign that inflation is hitting consumer spending, sales in value terms were 10.5 per cent higher than a year earlier even though the volume of sales rose by a more moderate 3 per cent. That means consumers are having to pay more to buy less. Excluding car sales, the value of retail sales rose by 1.1 per cent in the month and rose by 7.6 per cent on an annual basis.

Separate exchequer figures, published recently by the Department of Finance, show Government VAT receipts were strongly up in January, a reflection of higher prices but also strong-than-expected consumer spending.

The largest annual volume increase in retail volumes was in bars (+20.2 per cent). However, the CSO said caution should be exercised as this compares to a low base from the previous year. Bar sales remained 29.9 per cent lower than their pre-Covid level in February 2020.

Other sectors to show large annual volume increases were furniture and lighting (+13 per cent), fuel (+7.7 per cent), clothing, footwear and textiles (+7.4 per cent), and motor trades (+6.9 per cent).

Comparing with pre-Covid data from February 2020, the volume of sales in January was just 3.1 per cent higher but, by value, they were 16 per cent stronger.

The proportion of retail sales transacted online from Irish-registered companies was 5.6 per cent in January 2023 compared with 6.3 per cent in December 2022, 5.6 per cent in January 2022 and 11 per cent in January 2021.