Online shopping and level of savings reach record levels in Ireland, amid lockdown

Online sales in Ireland for April represented 15.5% of the total turnover for all businesses. Tim Goode/PA Wire

The level of savings by households in Ireland jumped by a record €3bn in April as consumers in lockdown were unable to spend.

Figures from the Central Bank show that deposits from Irish resident households saw the largest increase in since they began recording the figures in 2003.

The data coincides with figures released today by the Central Statistics Office (CSO) which confirm that the volume of retail sales decreased by 35.4% last month when compared to March.

The lockdown also meant that online sales represented 15.5% of the total turnover for all businesses, the highest online share since the collection of this breakdown began in 2018.

The proportion of clothing, footwear and textiles sold online increased almost eightfold compared to March with 81% of all sales taking place online.

The Central Bank said households across the country lodged €9.7bn more than they withdrew representing a growth rate of 9.1% over the year.

Deposits from non-financial corporations also increased, by €1.2bn which the Central Bank said may highlight an increased focus on cash management by companies given the current economic environment.

With the vast majority of retail outlets closed for the month of April, the CSO recorded the largest monthly decrease in spending since January 2009 when sales fell by 16.8%. The fall in retail sales had already begun in March with a 12.5% drop.

Bars and pubs, furniture and lighting, clothing and footwear and the motor trade all saw drops of more than 70%. Department stores, hardware stores and books, stationery and newspapers all saw falls of more than 50%.

The only sectors to show a volume increase in sales between March and April were supermarkets and outlets selling food, beverages and tobacco.

With a lack of consumer spending and an increase in saving the retail sector is hoping there will be pent up demand from shoppers once retailers are allowed reopen.

The latest Consumer Market Monitor report, published by the UCD Michael Smurfit Graduate Business School and the Marketing Institute of Ireland, said some of this lost spending may have been deferred and may come back later in the year.

"There is discussion in some quarters about the effect of pent-up demand and whether this may give a noticeable sales bounce across various sectors in the latter part of the year. This would be welcome if it happens but is unlikely to be enough to make up for almost a whole year of lost sales."

Retail Excellence, which supports 2,000 retailers across the country, has been in communication with retailers and retail associations across the globe and said Ireland can expect to enter two phases.

The first will be a pent up demand phase where consumers will demonstrate demand in certain product categories but will shop very functionally and cautiously off a pre-decided shopping list. This will be followed by a return to consumer hibernation due to health and safety and financial prudence concerns. "Overall retail revenues will fall between -15% and -40%," Retail Excellence Ireland said.

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