The volume of retail sales (i.e. excluding price effects)
increased by 0.9% in November 2010 when compared with November 2009 and there
was a monthly increase of 0.2%, the Central Statistics Office said today.
If Motor Trades, which in 2010 were boosted by a publicly
subsidised scrappage scheme, are excluded, the volume of retail sales decreased
by 0.9% in November 2010 when compared with November 2009, while there was a
monthly decrease of 0.2%.
Motors (+14.9%), Non-Specialised Stores (+1.5%) and Clothing,
Footwear & Textiles (+5.1%) were amongst the five categories that showed
year-on-year increases in the volume of retail sales this month. Furniture and
Lighting (-9.7%), Books, Newspapers & Stationery (-10.9%) and Bars (-11.4%) were
amongst the eight categories that showed annual declines. Month-on-month
declines in the volume of retail sales were evident in seven of the categories
while six categories showed monthly increases in November 2010.
The value of retail sales decreased by 1.1% in November 2010
when compared with November 2009 and there was a month-on-month change of -0.1%.
If Motor Trades are excluded, there was an annual decrease of 1.9% in the value
of retail sales and a monthly decrease of 0.4%.
Motors (+9.0%), Non-Specialised Stores (+0.4%) and Department
Stores (+8.0%) were the only categories that showed year-on-year increases in
the value of retail sales. The other ten categories showed year on year declines
in the value of retail sales.
Davy Research economist, Conall
Volume of retail sales rose
0.2% in November but fell 0.2% excluding motor trades
The volume of retail sales rose
by 0.2% on the month in November following a rise of 0.3% in October. In
annual terms, this means that the volume of retail sales increased by 0.9%
However, excluding motor trades,
the volume of retail sales fell by 0.2% on the month in November and by 0.9%
in the year to November.
The value of retail sales fell
by 0.1% on the month in November and declined by 1.1% in the year to
Level of retail sales
continues to stabilize but cannot be taken as firm evidence of a rebound in
Irish consumer spending
At best, today’s retail sales
release can be interpreted as indicating that the level of retail sales
continues to stabilize in the fourth quarter.
But this is not particularly
encouraging news once the impact of motor trades is excluded or when the
percentage changes in nominal terms are considered. In addition, we also
have to see if there is any impact from the bad weather in December.
It is also worth remembering
that the national accounts release last week indicated that overall consumer
spending contracted by 1.3% in Q3, although the volume of retail sales
expanded by 0.3% over the same period. So today’s retail sales numbers
cannot be taken as firm evidence of a rebound in consumer spending in the
Ulster Bank economists Simon
Barry and Lynsey Clemenger commented:
First back-to-back monthly
increase in total retail sales since March/April
November retail sales figures show a second consecutive monthly increase in
sales volumes. The 0.2% rise last month followed a 0.3% monthly gain in October,
representing the first back-to-back monthly increases since March/April. This
leaves total sales in October/November running some 0.4% above the average level
seen in the third quarter.
As has been the case for much of the year, the overall picture is being
flattered somewhat by rising levels of car sales. This was a pattern that was
again evident last month, according to the CSO, as the motor trade category
posted a 0.4% monthly rise in sales volumes. While modest by the standards of
the stronger increases in car sales earlier in the year, this was still enough
to pull total sales higher in November as core sales (which strips out the motor
trade) fell by 0.2% on the month. This 0.2% fall in underlying sales followed a
flat reading in October to leave core sales running about 0.5% lower than their
average level in the September quarter.
Broad based, but not
universal, declines in retail categories in November
Looking at a more detailed breakdown of retail sales trends in November,
weakness in the month was reasonably broad-based with seven of the twelve core
categories recording a monthly decrease in sales volumes. Bar sales were
particularly weak, falling by 4.6% from October, which took the level of sales
to its lowest in the current downturn. The same was also true for furniture and
lighting and books, newspapers and stationary, where sales volumes decreased by
a further 2.2% and 2.1% respectively.
However, it is also important to point out that the weakness in retail sales in
November was not universal. In addition to motor trades, five of the other
retail categories showed modest increases in sales volumes in the month. These
included electrical goods (+1.3% m/m) and other retail sales (+1.0% m/m). The
latter category includes items such as toys, jewellery and mobile phones;
therefore, it is not surprising to see some improvement in sales here in the run
up to Christmas. Food sales also rose in the month, albeit that the modest 0.5%
rise was not enough to offset the 1.6% drop in October.
Overall, core sales still under pressure but could have been an awful lot
Overall, the November retail sales report was a mixed bag as further increases
in motor trades mask a weaker underlying performance in consumer spending. Core
sales look to be headed for another quarterly decline in Q4, especially given
the likelihood if not inevitability of a weak December for retailers. Notably,
the survey cut-off date for the November figures was the 27th, just before the
really severe weather struck at the tail end of the month. With the country
experiencing an extended cold snap, a discernible weather impact is likely to
appear in next month’s numbers, not to mention the drag from both the Budget and
the negative newsflow around the IMF/EU support package. And yet, the reality is
that the latest retail figures could have been an awful lot worse. In
particular, the plunge in confidence recorded by the KBC/ESRI consumer sentiment
index in September and October had pointed to the possibility of a
correspondingly sharp pull back in actual spending patterns. However, while
underlying spending clearly remains soft, that risk has not materialised, thus
far at least.
Retail Ireland director Torlach
Denihan of the the IBEC group that represents the retail sector, said:
"Core retail sales (excluding cars and bars) held up reasonably well in November
despite the extraordinary developments when Ireland sought support from the IMF
and EU. There may be some grounds to hope that the retail sector is close to the
"While it is difficult to predict figures for December, it seems that there will
be a 5% annual fall in the value of core retail sales (excluding cars and bars)
in 2010 and a 2% annual fall in volume. This will be the third year in a row in
which core retail sales have fallen.
"In view of the protracted difficult trading conditions it is unrealistic for
the Retail Joint Labour Committee to insist that pay rates be increased in
January and this decision should be reversed to preserve employment. Landlords
and their banks must reverse all rent increases under the last rent review to
reflect the decline in retail sales and the property market since that review
"On a positive note, despite the weather shops remain open for business today
and virtually all deliveries are getting through. There is almost full
availability of products and extended opening hours to facilitate the public in
preparing for Christmas."
Retail Excellence Ireland (REI),
another industry group, today warned that December 2010 will be the
weakest period of trading in recent history. Following significant blows to the
retail industry including IMF intervention, budget 2011 and abject consumer
sentiment, the arrival of the adverse weather has decimated consumer activity
Commenting today David Fitzsimons
Chief Executive, Retail Excellence Ireland said: “The retail industry has
been hit with the perfect storm in recent weeks. If IMF intervention and a very
severe budget were not enough, the arrival of arctic conditions has minimised
shopping activity and has left many of the largest destination shopping centres
and cities near empty.
While regional retailers have been negatively impacted due to reduced shopper
activity they have also gained as customers stay local. Retailers who are in the
worst distress are those who are in the primary shopping centres and retail park
locations with Dublin hit very severely.
These schemes are dependant on custom from a wide radius and charge rent based
on significant footfall levels. The footfall has stayed away from these
locations due to the adverse weather.”