The volume of retail sales decreased by 0.3 per cent in October but was still 4.1 per cent ahead of the same period last year, new figures show.
The latest Retail Sales Index from the Central Statistics Office shows that, if motor trades are excluded, there was a decrease of 0.1 per cent in the volume of retail sales in October when compared with September, while there was an increase of 3.8 per cent in the annual figure.
The sectors with the largest monthly decreases were electrical goods, which fell 1.5 per cent, and furniture and lighting, which fell by 1.2 per cent.
The sectors with the largest month on month volume increases were hardware, paints and glass, which rose 3.1 per cent, and other retail sales, which were up 1.7 per cent.
There was a decrease of 0.4 per cent in the value of retail sales in October when compared with September, and there was an annual increase of 2.2 per cent when compared with October 2015.
If motor trades are excluded, there was no monthly change in the value of retail sales and an annual increase of 1.8 per cent.
Car sales
Goodbody chief economist Dermot O’Leary said it was “worth noting” that retail sales were growing at double-digit rates at the beginning of the year. “The primary reason for the slowdown is car sales,” he said.
“Car sales volumes grew by 6 per cent year on year in October, relative to 20 per cent year on year as recently as July.
“It is noteworthy that the licensing of second-hand vehicles has surged over the same period. In the three months to October, the number of second-hand vehicles licensed for the first time rose by 59 per cent year on year.
“This reflects imports of vehicles from the UK as consumers take advantage of the cheaper value of sterling. Outside of cars, the annual growth rate of core retail sales volumes has remained relatively stable.”
An analyst with Davy said the “bigger picture” was that weaker sterling “might now be putting pressure on Irish retailers competing against cross-border trade and online sales as well as weighing on consumer prices”.
Responding to the release of the figures, the Irish Small and Medium Enterprises Association (ISME) encouraged consumers to “buy local and support indigenous SMEs” when shopping for Christmas.
Devaluation of sterling
Isme chief executive Neil McDonnell said buying goods produced, manufactured and sold locally was the easiest way to support the economic recovery.
“Irish consumers need to support retailers and local businesses,” he said. “The devaluation of sterling is having an impact on sales and on consumer sentiment.
“With cross-border shopping on the increase and consumer sentiment at a 20-month low, Irish consumers need to get behind and support Irish businesses. The continued monthly decline in volume and value is a matter of concern.”
He said the main issues facing retailers were “very low” margins, negative cross-border trade, “excessive business costs” such as insurance, rates, and development charges, as well as “insufficient bank credit availability” for SMEs.
“When we buy indigenous goods, we support local businesses and create new jobs,” he said. “It is important in the run-up to the Christmas season that consumers buy local. In doing so, they are supporting the home-grown economy.”
