Source: CSO

The volume of Irish retail sales (i.e. excluding price effects) fell 9.1% in October 2009 compared to October 2008. There was a monthly decrease of 0.3%.

If Motor Trades are excluded the volume of retail sales decreased by 6.7% in October 2009 compared to October 2008 and the monthly change was -1.7%.

All sectors showed year on year volume declines with the most significant declines being:

• Non-Specialised Stores (includes supermarkets) down 3.1% Motor Trades down 24.1%
• Clothing Footwear and Textiles down 6.8%
• Bars down 8.2%
• Household Equipment down 11.7%

The value of retail sales decreased by 13.9% in October 2009 compared to October 2008 and decreased by 0.6% in the month. However, if Motor Trades are excluded, the annual decrease was 12.0% and the monthly change was -1.6%.For

Deirdre Ryan, economist at Goodbody Stockbrokers commented:

A poor month for retail sales in October...-Following a better September performance, retail sales dipped again in October. Total sales volumes dropped 0.3% mom, while core sales volumes fell 1.7% in October. On an annual basis, the rate of decline in headline sales improved slightly to -9.1% yoy (-9.8% yoy in September), but core sales growth deteriorated a touch to -6.7% (-6% yoy in September). Monthly data can be volatile, and especially in the case of retail sales. Nevertheless, these latest numbers do indicate that a weak start was made to the final quarter of the year for spending, after Q3 recorded the first quarterly increase in core sales volumes in six quarters. Assuming that core sales remain at the current level for the remainder of Q4 implies a decline of 1.5% qoq for core sales.

...despite continued extensive discounting - Significant price cutting continues in the retail sector. The overall retail sales deflator was -5.7% yoy in October and has remained at close to this level for a number of months. However, given these latest numbers, continued price incentives will be needed to stimulate consumer spending in the final months of the year.

Q3 accounts set to show a 7% yoy fall in spending in Q3 - In all consumer spending is likely to have fallen by close to 7% yoy in Q3, when the national accounts for the third quarter are released next Thursday (17th December). While this is clearly a severe contraction in spending levels, such an outturn would nonetheless be in line with that seen in Q2, and would confirm our view that the worst is past in terms of the rate of contraction in spending. For the full year a decline of 7.5% is forecast. The subdued nature of the recovery to occur in the latter stages of 2010 is reflected in the fact that a further decline in spending is estimated next year, although this will be much less severe at -2%.