Further softening seen in cars, bars and big store sales
A further softening in retail sales is expected as the second half of the year progresses, after a continued slowdown in consumer spending in the past three months.
New CSO figures show that consumer spending volumes fell by 1.4%, year-on-year, in the three months to the end of July. The big losers were the motor trade, with car sales falling 8.5%; department stores, where sales fell 4.6%; and pubs and bars, where consumer spending fell a further 4.2%.
The pub trade has seen sales consistently dive over recent quarters.
The CSO said retail sales fell 4.4%, year-on-year, in July alone; dragged down by a 13% fall in car sales. However, when motor vehicles are excluded, sales volumes rose by 1.9% in the month and by over 4% year-on-year.
Economist Alan McQuaid said that even though Irish consumers are still spending, the erratic nature of retail sales figures is likely to persist. He said the weakness of sterling may tempt shoppers up North ahead of the October 31 Brexit deadline, but also said some fall-off in sales is likely in the second half of the year on the back of slowing employment growth and marked slowdowns in manufacturing and construction growth.
Earlier this week, CSO figures showed that jobs growth fell for the first time in seven years in the second quarter of the year.
Mr McQuaid said it would be no surprise if that data was reflected in other numbers.
Also this week, the Ibec-affiliated representative group Retail Ireland said the recent "softening" in consumer sentiment, coupled with a slide in the value of sterling, "will make it a challenging environment for the retail sector in the months ahead".
"There is no doubt that choppy waters lie ahead for the retail sector. The type of Brexit we experience will likely shape our ambitions for growth in the sector for the remainder of 2019 and 2020," said Retail Ireland director Thomas Burke.
"Our consumer is now hyper conscious of the negative impact a no-deal Brexit could have on their personal finances and that means they are likely to react quickly to any sub-optimum outcome. We, too, must plan for the worst but hope for the best."
