Eason’s sales grow but consumer migration to online made for ‘challenging’ year

Irish books and stationery retailer Eason saw sales at its retail business in the Republic and its online store increase in the 11 months to the end of December 2018, but sales in Northern Ireland declined again in what chairman David Dilger has told shareholders was another "challenging" year.

In spite of these challenges, Mr Dilger said Eason had “delivered” on its financial targets for the year, both in terms of revenues and profits.

He told Eason’s 220 shareholders that the rate of shopper migration to online happened at a “faster pace than anticipated”, particularly around the Black Friday sales event in November.

“Value erosion through increased discounting was a particular feature of this year’s marketplace, driven primarily by online competition,” he said.

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“While we competed through aggressive discounting during this period, growing ecommerce revenues by 40 per cent-plus and maintaining and growing market share, such discounting was unsustainable over the entire Christmas period.”

He said the retail business in the Republic was up 1 per cent for the 11 months to the end of December despite the “changing footfall dynamic” and further declines in the news and magazines markets, which fell 5.9 per cent.

On a like-for-like basis, sales in its physical stores were flat over the period, with a “mixed performance” across the estate. “Our main high street stores suffered the brunt of footfall migration, accounting for a 1 per cent decline over the period.”

Online revenues

Mr Dilger said the continued improved performance of stores opened or refurbished in the past 18 months, including Swords, Crescent Shopping Centre in Limerick, and St Stephen's Green in Dublin, helped to offset this decline. Online revenues rose by 12 per cent, "adding a further 1 per cent to turnover over the 11 months".

Its business in Northern Ireland had another “challenging year”, with revenues down 4.7 per cent on a like-for-like basis. Books were down 3 per cent, while news and magazines declined by 5 per cent.

Mr Dilger said Brexit continued to create "uncertainty and specific challenges" for Eason.

“The main risks for Eason are likely to be exchange rate instability and the potential for disruption to the inbound supply chain arising from the introduction of new customs arrangements.”

Mr Dilger also told shareholders that Eason had sold its St Margaret’s warehouse in Dublin to Irish property fund Iput for €19 million. This deal allows it to transfer €20 million to its retail business and to generate dividends for shareholders.