Best Christmas sales for five years
Irish households will spend an extra €650 to €750 in shops this month, compared to other months of the year
1 December 2014
Ibec’s Christmas Monitor 2014 indicates that this Christmas will be the best for the retail sector since 2009. The report, released this morning, tracks key trends across the economy and the sector to give an insight into how they are likely to impact the key Christmas trading period. Crucially, the monitor shows that more money is likely to be spent in the shops this December (€3,960 million up from €3,880 million in 2013), representing an annual rise of over 2%. Irish households will spend an extra €650 to €750 in shops this month, compared to other months of the year.
Retail sales in the first nine months of this year are up 1.5% in value terms on the same period in 2013 excluding the effects of buoyant car sales. This is one of the first signs of a recovery in a retail economy where turnover fell by almost 25% between its peak in 2007 and a low point last year.
Retail Ireland’s most recent forecasts expect in the region of 35,000 extra at work since last Christmas, and almost 96,000 more than in Christmas 2012. In addition, disposable income rose by 3.3% in 2013 and Retail Ireland expects it to grow by a further 3% in 2014.
Although consumer sentiment has fluctuated it is now at its highest point since 2007. The annualised average of the ESRI/KBC consumer sentiment index is now 30% higher than it was in 2013, 70% higher than it was between 2008 and 2009 and 10% higher than 2007. The forward looking expectations index is 40% up on the same period last year (the year to October) with consumers far more optimistic coming into Christmas 2015.
Competition remains intense in the sector and this is keeping prices down. At present, goods inflation is at minus 2% annually as shops battle for footfall. Goods prices this December are on course to be at their lowest level since December 2002. Downward price pressures will continue into the post-Christmas sales period.
Retail Ireland director Thomas Burke said: “The Irish retail sector has had some very tough years, but there is now cause for cautious optimism. The next few weeks are by far the most important trading period of the year, and key indicators are pointing in the right direction. More people are at work, disposable income is rising and the Irish consumer is more positive about the future. This should translate into a really strong Christmas period for the sector. This is good news for the economy; it means more jobs and more tax revenue.
On the issue of rents and improving shopping districts, Burke said: “Many retailers still pay unsustainably high rents, the government should support Senator Feargal Quinn’s Bill on upward only rent reviews, which has been backed by the Seanad. Retailers continue to pay high commercial rates to local authorities, while the quality services is diminishing, a fairer system is needed. Also much more needs to be done to make town and city centres better places to visit and shop, including a greater Garda presence.”