Retailers enjoyed their best year in six years in 2006, according to figures released yesterday. A strong rise in December sales helped the sector record a 6.2 per cent increase last year - compared with 4.8 per cent growth in 2005 - putting in their strongest performance since 2000.
The relatively small monthly increase in December - up 0.8 per cent on November - masked what was a very good Christmas for the retail sector. In volume terms - when the impact of price rises on sales values is taken into account - retail sales rose by 7.4 per cent year on year.
Growth in sales of traditional Christmas gifts was particularly strong. Electrical goods sales were 12.9 per cent higher than the previous December; footwear and leather products grew by 8.8 per cent; and textiles and clothing products grew by 12.9 per cent. Hardware, paints and glass sales fell annually by 3 per cent, but this most likely reflected very high levels of activity associated with rising levels of house purchases the previous year.
Analysts said poor motor sales acted as a "drag" on growth, adding that this made the growth figures more striking.
The Central Statistics Office also revised November's retail sales annual growth figure upwards, confirming a strong performance for consumer activity in the final quarter of the year.
"The momentum seen in the latest retail sales release leaves scope for further upgrades in the months ahead," Goodbody Stockbrokers economist Dermot O'Leary said yesterday.
Davy economist Rossa White predicted that revenue growth would be even stronger this year as motor sales recovered from modest growth last year. "We forecast 7 per cent consumer spending growth in 2007 . . . new car sales increased 7.9 per cent year on year in January."
The latest figures confirm that the prices of goods remained subdued. In value terms, retail sales growth in December was just over 1 per cent higher than volume growth, implying an equivalent increase in prices. "If inflation is a problem, it is not coming from the goods sector," Ulster Bank chief economist Pat McArdle said yesterday.
