Cautious optimism for Irish retail sector
Struggling shops can look forward to 2015 with a sense of cautious optimism, a leading business body has said.
With thousands more in employment, greater disposable incomes and an improved level of consumer confidence predictions that the pace of recovery will increase during this year, have been made by industry representatives, Retail Ireland.
But, the Ibec group has also warned that cost pressures and unrealistic wage demands could derail the process which is still in its infancy.
Retail Ireland director Tom Burke said: “Talk from certain unions of large, wide-spread pay awards is utterly unrealistic and at odds with the reality facing retailers around the country.
“Creating unrealistic expectations will only result in harmful discord in workplaces and could force companies to rethink recruitment plans. Retail was one of the last sectors to feel the recovery and we still have a very long way to go.”
In its first quarterly Retail Monitor -- which tracks key issues across the economy -- Retail Ireland described the Christmas trading period as positive and said January VAT returns were 225 million euro (12.9%) ahead of last year.
It estimated consumer spending would rise by 2.7% in 2015, following growth of 1.3% last year.
The dramatic fall in oil prices is also expected to boost consumer spending power, according to the survey. Every 10 dollar fall in the price of a barrel of oil translates into an additional 100 million euro spending power for Irish consumers, Retail Ireland said.
And, consumers look set to benefit from yet another year of low inflation, with intense competition keeping prices down, it is claimed. The group has estimated overall inflation in the economy to be 0.4% this year.
The Retail Monitor also shows that supermarkets and convenience stores in the greater Dublin area have shown the strongest signs of recovery with regional locations lagging behind.
Pharmacies have reported a rise in the sales of healthcare product such as cough medicines compared to last year while the revival of the property market has sparked a surge in furniture and electronics sales.
The sales of books and newspapers have continued to declined because of the migration to digital formats, Retail Ireland said.
Mr Burke said: “The (retail) sector has had some very tough years, but indicators would suggest that fortunes are starting to look up.
“Key indicators are pointing in the right direction. More people are at work, disposable income is rising and falling oil prices will increase consumer spending power.
“This is good news for the wider economy. It means more jobs and more tax revenue.”
