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News : Irish Economy Last Updated: Mar 29, 2011 - 6:08 AM

Irish retail sales volume dipped by 0.7% in February 2011 compared with February 2010
By Finfacts Team
Mar 28, 2011 - 2:30 PM

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Source: CSO

The volume of Irish retail sales (i.e. excluding price effects) decreased by 0.7% in February 2011 when compared with February 2010 and there was a monthly increase of 3.2%. If Motor Trades are excluded, the volume of retail sales dipped by -3.2% in February 2011 when compared with February 2010, while there was a monthly decrease of 0.3%.

The CSO said Motor Trades (5.3%), Non-Specialised Stores (0.5%) and Clothing, Footwear & Textiles (0.7%) were amongst the four categories that showed year-on-year increases in the volume of retail sales this month. Pharmaceuticals Medical and Cosmetic Articles (-7.0%) Fuel (-8.0%), Furniture & Lighting (-12.9%) and Other Retail Sales (-11.4%) were amongst the nine categories that showed year-on-year decreases in the volume of retail sales this month.

The value of retail sales fell 0.3% in February 2011 when compared with February 2010 and there was a month-on-month change of +1.0%. If Motor Trades are excluded, there was an annual decrease of 1.9% in the value of retail sales and a monthly decrease of 0.8%.

IBEC group's Retail Ireland director Torlach Denihan said: "Retail sales continued to deteriorate into February. Consumers adjusted their spending as many received the first monthly pay cheque at end January affected by the Budget tax increases.

"The fact that the value of core retail sales (excluding cars and bars) is now into the fourth year of decline shows the need for urgent action by the new Government to help sustain the 240,000 jobs in the retail sector. Urgent reform is needed to reduce key business costs, such as rent, Joint Labour Committee pay scales, and commercial rates, and improve access to credit.

"Government must act to restore consumer confidence so that consumers will spend instead of saving excessively.

"Legislation to address unsustainable commercial rents is needed urgently. The new Attorney General should immediately review the issue of upward only rent review clauses, with a view to clearing the way for new legislation to abolish them in existing leases.

"The Joint Labour Committee for setting wages in the retail grocery sector are destroying jobs and are unnecessary because of the national minimum wage. The ongoing review of these rules must lead to a major overhaul in the system."

The solution for retail demand is not wage cuts but growth in the economy.

Retail Excellence Ireland called on the Government to speedily implement a series of reform measures to allow Irish retailers to adjust their cost base.

David Fitzsimons, REI CEO said, "Ireland's retail industry is in the 38th consecutive month of decline. Today's CSO figures show clearly that the moderation in the rate of this decline that we saw in the December and January figures has ended. February saw the rate of retail sales decline increase again. One of the leading reasons for this trend is the introduction of the Universal Social Charge.

“The solution is for the Government to act speedily to implement the package of reforms outlined in the Programme for Government. Reforms such as banning upwards only rent reviews and modernising the industry wage setting mechanisms will be crucial if large sections of Ireland's retail industry is to survive. With retail sales continuing to fall, retailers must be facilitated in adjusting their cost base to the hugely changed trading environment."

Source: Davy

Davy economist, Cathal McCoille, commented:

Retail sales decline in February

  • The volume of retail sales excluding motor trades fell by 0.3% in February on the month;

  • The decline in February followed a sharp fall of 2.7% in December and a rise of 2.7% in January;

  • Today's release suggests that the January data reflected a weather-related rebound and that the outlook for consumer spending remains weak;

  • The decline in retail sales is not surprising given the decline in consumer confidence through the second half of 2010, the fiscal retrenchment and the continued fall in employment.

Volatile headline measure including motor trades rises on the month

  • The overall seasonally adjusted volume of retail sales rose by 3.2% on the month but fell by 0.7% compared with February 2010;

  • In value terms, sales rose by 1.0% on the month and declined by 0.3% compared with February 2010;

  • The volume of sales in motor trades and department stores grew by 5.0% and 11.5% respectively on the month and by 5.3% and 0.2% in annual terms.

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