Goodbody Economist Deirdre Ryan commented:

Overall improvement not surprising....-As expected, retail sales data just released indicate a modestly improving trend in relation to consumer spending patterns in Ireland. Overall sales declined by 9% yoy in August (-14% yoy in August). This outturn does not come as a surprise given that earlier car registrations data had flagged this improvement (car sales account for a third of total sales volumes).

...although revisions imply a changed trajectory... -Within the monthly data there are some quite notable revisions, which although have little effect on the annual rates of decline as mentioned above, indicate quite a significant shift in terms of the monthly trends relative to earlier releases. For instance, the revised numbers indicate core retail sales increased monthly in three of the four months April to July, relative to our earlier assertion that they had declined monthly in three of those four months. According to today’s release, core sales declined 1.8% mom in August (-1% mom for total sales). However, given the revisions which imply this decline comes after three consecutive monthly increases in sales, it makes it somewhat more difficult to discern the true trajectory of spending. The nature of the revisions indicates that August’s decline came after a period of relative resilience in spending.

...but headwinds for consumer sector remain Overall, these data indicate a relatively stronger outturn in the summer months than originally suspected, notwithstanding August’s monthly weakness. The Q2 GDP data highlighted the bulk of the decline in consumer spending had already taken place, although any significant near term bounce in spending remains unlikely also. Our latest Economic Commentary, published yesterday details these headwinds, where we expect overall consumption to decline 7.5% this year, before a more moderate decline of 2% next year.

Retail Ireland Director Torlach Denihan said: “The value of core retail sales, excluding car, fuel and bar sales, was down -9.7% in August, whereas sales volumes were down -4%, showing how prices have been cut across the board. In other words, consumers got more for their money.

"Food sales are still in negative territory compared to last year, as are virtually all other categories of goods. There is some slowdown in the colossal declines in sales volumes in furniture, lighting and hardware experienced in recent months.

“The continued weakness of sterling poses a major threat to the retail sector in the run up to Christmas. We estimate that cross-border shopping costs the Exchequer €430m and that it is too late to wait until budget day to tackle this. We advocate that from 1 November Government take pre-emptive action by:

• reducing the excise levels on alcohol by 20% because alcohol is the single biggest motivation for cross-border shopping trips. We have the highest excise in Europe for wine and the second highest for beer and spirits. The North now accounts for almost half of all alcohol sales on the island because of cross-border shopping and the imbalance needs to be rectified.

• reducing VAT to 18% to stimulate retail sales. The public are now saving 12% of disposable income and they need to be encouraged to spend some of this to create employment and give the economy a boost;

"We also urge that the political parties ask their councillors to cut commercial rates by 20% when they vote on Local Authorities to set annual rate on valuation over the coming weeks,"concluded Denihan.

The remedies are always easy to put forward as there is no perceived obligation to propose an alternative for the lost revenue just like Ryanair and its campaign against the €10 travel tax and so much more.