Retail body says overseas online shopping a challenge to Irish industry

Shoppers boosted spending this Christmas but overseas online outlets cut the growth enjoyed by Irish retailers, the industry says.

Industry body Retail Ireland, part of employers' group Ibec, reported that the sector was on track to hit or surpass Christmas sales growth targets.

The organisation had predicted that households would spend an average of €2,654 each on Christmas shopping while the value of festive-season sales would grow 2.6 per cent.

However Retail Ireland director Thomas Burke said that overseas online players posed an increasingly tough challenge to the Irish industry.

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“Disposable incomes are up 5 per cent and our sales are up about 2.5 per cent, so the difference there has to be online – that’s retailers outside the Irish market,” he said.

Rival body Retail Excellence estimated at the weekend that Irish consumers had spent €300 million with UK websites in the first three weeks of December.

That organisation's chief executive, David Fitzsimons, said retail sales dipped in the latter part of the month.

He suggested that the “Black Friday” promotion ate into a significant proportion of conventional Christmas shopping.

Websites

Mr Burke noted that local retailers had responded to the challenge by launching websites of their own and were beginning to see results from this.

“We have to get better at telling the story of our own online offering,” he said. “Retailers are finding that it does take a certain amount of time to build awareness of their own online presence.”

They have also cut prices in an effort to lure and keep customers. “We’re at 2009 price levels in the Irish retail sector,” Mr Burke said.

“Prices are down 8 per cent in the last three years – that’s largely down to intense competition in Irish retailing.”

His organisation noted that retailers were reporting solid but unspectacular growth over the 2016 Christmas shopping period.

Mr Burke acknowledged that factors such as the high numbers of people at work and population growth of 53,000 in the 12 months to April 2017, benefited the industry.

Brexit

He warned that the British pound’s ongoing weakness – caused by the various rows over Brexit – had put retailers in the Border area under sustained pressure.

Retail Ireland also noted that stores in Dublin performed better than those outside the capital.

Mr Burke predicted that retailers were likely to offer sharp reductions in the post-Christmas sales. “You will see discounts on discounts over the next few days,” he said.

He noted that Retail Ireland was cautiously optimistic for 2018. “There are more people at work, generally the economy is doing very well, but there are potential clouds on the horizon,” Mr Burke said.