HARD-PRESSED retailers got a boost in December as the volume of retail sales rose by 3 per cent compared to the same period in 2010. Month-on-month sales were up more than 2 per cent compared to November.
However, retail groups warned that the industry was still facing significant job losses as retailers were forced to close stores. They called for Government action to help alleviate the problem.
Department stores saw some of the benefit of December’s increase, with sales there rising by 8.1 per cent over the month. Sales at bars were lifted by 2.7 per cent compared with November.
However, furniture and lighting sales continued to suffer, falling by 5.6 per cent, while food, drink and tobacco in specialised stores saw volume drop by 3.2 per cent.
While sales were 3 per cent higher on an annual basis, industry figures noted that the harsh weather in 2010 had affected sales figures that month.
The volatile motor industry accounted for the bulk of the change, with sales in the sector rising by just over 26 per cent month-on-month. When the motor trade was excluded, sales were only 0.2 per cent higher compared with November 2011, and 0.6 per cent compared with a year earlier.
Analysts said last year’s poor weather made it difficult to identify trends but the sharp fall in retail sales appeared to have slowed.
“Given the difficulty in comparing annual trends, comparing changes over a two-year period may be more appropriate,” said Goodbody chief economist Dermot O’Leary.
“On this basis, core sales volumes were down by 1.7 per cent in December 2011 relative to December 2009, indicating that the retail environment still remains quite depressed, albeit the rate of decline is slower than witnessed earlier in 2011.”
Goodbody is predicting a 3 per cent decline in retail sales for this year as falling employment and higher sales tax hold back any significant improvement.
Bloxham chief economist Alan McQuaid said the approaching VAT hike may have prompted some consumers to shop early, causing a spike in sales.
“Overall there is little to be optimistic about as regards the Irish consumer or personal spending in the immediate future.”
While industry body Retail Excellence Ireland welcomed the jump in sales, it also warned of a challenging year ahead for retailers, with low consumer confidence set to continue and the added pressure of the 2 percentage point VAT rise.
