CONSUMERS RETURNED to shops and garages in February, with a double-digit bounce in car sales pushing total retail sales back into positive territory on an annual basis for the first time since January 2008.
The volume of retail goods sold in February was 3 per cent higher than it was a year ago, the Central Statistics Office (CSO) said yesterday.
If the effect of 30 per cent annual growth in motor trade sales is stripped out, “core” retail sales volumes are running 3.1 per cent lower than they were in February 2009.
However, there was a rebound across several sales categories in February compared to January, prompting economists to welcome the monthly figures as an indication that consumer sentiment has improved. The volume of core retail sales rose 1.2 per cent over the month.
There was a recovery in sales in sectors linked to the housing market, with a 14.9 per cent monthly rise in sales of furniture and lighting, taking the annual rate of growth in this category to 4.7 per cent.
Sales of hardware, paints and glass rose 4.8 per cent on a monthly basis, while sales of electrical goods increased 3.3 per cent compared to January.
The CSO’s “other retail sales” category – which includes items such as toys, mobile phones and jewellery – rose “impressively”, according to Ulster Bank economist Lynsey Clemenger.
“Given that the purchase of such goods tends to be of a discretionary nature, this provides some evidence of a pick-up in consumer confidence,” she said.
Ms Clemenger added that the February sales data “had a more positive feel to it”, with upward revisions to data relating to previous months adding to the upbeat tone.
“Recent confidence and spending trends do offer important encouragement that the Irish consumer has entered a period of greater stability.”
However, sales of food, beverages and tobacco remained weak, falling 2.3 per cent on a monthly basis and 5 per cent year-on-year.
Bar sales were also subdued, dropping 2.7 per cent compared to January and running 10.9 per cent lower on an annual basis.
February was the second consecutive month where there was a rise in the volume of core retail goods sold. It was also the third consecutive month in which the value of the goods sold increased.
Davy research economist Rossa White said it appeared that retailers were not discounting at as sharp a rate as in 2009. “The pick-up in consumer demand has probably relieved some pressure on retailers to keep cutting prices,” he said.
The value of core retail sales rose 0.1 per cent in February compared to January. Over the year to February, the value of core sales is down 7.4 per cent.
Torlach Denihan, director of Ibec-affiliated industry body Retail Ireland, said the figures showed that major discounting had taken place over the past year and that retailers needed to reduce costs.
Retail Excellence Ireland welcomed the stabilisation of retail sales, but said the industry was still “officially in a state of distressed trading”.
