Consumer confidence remains strong despite Brexit and is driving spending increases across virtually all sectors, according to the latest Consumer Market Monitor (CMM) from the UCD Michael Smurfit Graduate business school and the Marketing Institute of Ireland.
However, a separate report from Retail Ireland, the Ibec group representing the retail sector, has highlighted some consumer unease following the British referendum and pointed to increased pressure on retailers due to sterling’s rapid decline.
"It remains too early to gauge the long-term impact of the decision by the United Kingdom to leave the European Union, and to judge whether it has caused any real slowdown in the local and global economy," said Retail Ireland director Thomas Burke.
“There is, however, a clear understanding among Irish consumers that the referendum result will impact the Irish economy, and potentially their own personal circumstances. While Brexit is less likely to threaten Irish consumer confidence than British sentiment, any uncertainty is in itself bad news for a retail sector at this delicate point in its recovery.”
New cars
The Retail Ireland figures show supermarket sales up 3.7 per cent while department store sales climbed 4.6 per cent. Fuel sales were down 6.1 per cent with sales of furniture and homewares said to be up 7.9 per cent.
The CMM, meanwhile, highlights sales of new cars which, following several lean years, were up more than 30 per cent last year to 121,110.
The trend has continued into 2016 with 97,490 cars sold in the first half of the year, up 24 per cent on the same period in 2015.
Sale of property is one area that is not showing strong growth. There were 48,700 residential sales transactions in 2015, and more than 40,000 in 2014.
In contrast, there were just 16,743 sales to the end of May 2016, down 7 per cent on the same period in 2015.
Mortgages
Mortgage approvals were also down 11 per cent to the end of May, further evidence of a weak market. Growth for the year is expected to be muted with the data indicating it will be less than 5 per cent.
"The imbalance of consumer spending and property sales needs to be addressed so as to bring the economy into better balance," said Mary Lambkin, professor of marketing at the Smurfit school and one of the authors of the CMM report.
Fuel
Meanwhile, average fuel prices have fallen for the third month in a row, reaching their lowest level since April 2016, according to the AA’s survey of national fuel prices. It found that a litre of petrol now costs an average of 127.5 cent down 3.8 cent with diesel prices dropping by 2.3 cent.
Falling pump prices are partly the result of a recent drop in the cost of oil, which now sits at €45.54 compared to a high of €49 in mid-July.
"We are always pleased to see the price come down as it effects all of us," said director of consumer affairs Conor Faughnan.
“It has been an up-and-down year for fuel but the last few months have seen it move in the right direction.”
