It does not look like being the happiest of Christmases for Irish retailers as British-based online businesses drained away much of the disposable income from the Republic’s consumers .
However retailers' difficulties could be shoppers' opportunities with prices in some sectors falling to levels not seen since Christmas 2000, according to Retail Ireland, the Ibec group which represents the retail trade.
Early seasonal trends which have emerged suggest retailers have been hit hard by competition from UK based online retailers and cross border trade while intense competition in the grocery sector has seen consumers benefitting from deep discounting as supermarkets battled for footfall.
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Sales in fashion and footwear have also been impacted by unseasonably mild weather in recent weeks although two extra shopping days this Christmas week, compared to Christmas 2015, may prove crucial in helping retailers realise their pre-Christmas targets
"The sector is struggling to meet growth targets due to challenging trading conditions," said director of Retail Ireland Thomas Burke.
Earlier this year the group indicated a rise in consumer spending in the region of 3.5 per cent over the Christmas period. Had this been realised, it would have significantly boosted sales, by over €160 million this December.
But feedback from retailers suggests a strong performance in the post-Christmas sales period would be needed if the sector is to realise those levels before the end of the year.
Mr Burke said 2016 had been “the proverbial tale of two halves for Irish retailers. While the first six months of the year saw sustained growth in the sector, the mid-point of the year marked a significant slow down in this growth trajectory.
“Unfortunately it would appear that this trend has continued into the Christmas period. An increase in cross border trade and growing competition from UK based online retailers has drained a lot of the additional consumer disposable income away from domestic retailers.”
He said retailers had been forced to discount prices heavily in recent weeks with pre-Christmas sales now seemingly the norm in the sector. “In addition sterling weakness in the second half of the year has led to prices on UK sourced products, such as books, falling considerably over recent weeks.
He said prices fell by 3 per cent in the last 12 months alone as competition between retailers has driven prices back to Christmas 2000 levels. “Retailers are hoping this will entice more consumer spend and translate into valuable sales in the coming days.”
