Shoppers became more cautious in May as high street activity fell. The value of retail sales was down 2.2 per cent in May compared to April, while volumes fell by 2.5 per cent in seasonally adjusted terms, according to data released by the Central Statistics Office (CSO) yesterday.
But when compared with May of last year, values continued to grow by 6.6 per cent, and volumes by 4.4 per cent. The respective annual growth rates for April were 8.7 per cent and 6.6 per cent.
Falls in motor sales were largely responsible for the decline last month. When their impact is excluded volumes rose 0.5 per cent in May on April levels, and were up by 7.3 per cent in annual terms.
Strong monthly declines also occurred in sectors traditionally associated with housing activity. Furniture and lighting equipment sales were 8.6 per cent down on April volumes, while hardware, glass and paint products fell by 3.2 per cent. However, these categories sustained strong annual growth.
Department stores were also hit by the downturn, with seasonally adjusted sales values and volumes both down 6.8 per cent on April levels.
Analysts reacted by trimming forecasts for consumer spending growth this year. "New car sales are the main culprit behind the deceleration in the pace of growth. Car sales spiked early in the year but have been sluggish since February," Davy Stockbrokers economist Rossa White said yesterday.
"With the exception of last November, the 4.4 per cent increase in sales was the lowest since the pick-up began to gather momentum last summer," Ulster Bank chief economist Pat McArdle said yesterday.
"These numbers confirm our suspicions that the strong April data were related to Easter. There was, however, a modest pick up. Core sales in May were up 0.6 per cent as compared with an average rise of 0.4 per cent rise in March/April.
"One would not be too sanguine about June given the further fall in confidence that has occurred and the current spate of oil price rises," said Mr McArdle.
Ireland's retail sales growth performance continues to compare favourably with that of other EU economies, according to comparative data available up to April. Excluding the motor trade and bars, retail sales grew by 9.4 per cent in Ireland, compared with 2.4 per cent growth in the euro zone and 3.5 per cent growth across the EU.
