Consumer spending to rise by over 1% in 2014
Forecasted growth of 1.3% for retail in 2014 is "a move in the right direction," according to Retail Ireland, although ISME reports sales expectations have dropped within retail
Print6 January 2014
Retail Ireland, the Ibec group that represents the retail sector, has projected that consumer spending will rise by 1.3% in 2014, the first such increase since the start of the recession. In its New Year statement, the group said that despite recent positive indications, the sector remains under severe pressure. Consumers will continue to benefit from low inflation next year, due to intense competition in the sector.
Retail Ireland director Stephen Lynam, said: "2014 is likely to see the first increase in consumer spending for many years. While forecasted growth of 1.3% is low, it is a move in the right direction. Spending fell in 2012 and was static in 2013. At present, goods inflation is in negative territory as shops battle for footfall. Intense competition in the retail sector is likely to keep prices down in 2014.
"The recovery in the sector is fragile and government must ensure that no extra costs or unnecessary regulations are imposed as recovery takes hold. Keeping costs under control is essential if we are to create new jobs. At the height of the boom many costs, including wages, spiralled out of control, we cannot allow this to happen again. Many retailers remain in survival mode and pay expectations need to reflect economic realities.
"Many retailers reported a positive start to December, a fall off in sales in the run up to Christmas and a busy post-Christmas period. However, recent news coverage is only anecdotal. Official CSO data, to be released at the end of January, will give the complete picture."
In further good news, at the recent launch of the Quarterly SME Business Trends Survey for Q4 2013, by ISME, the Irish Small & Medium Enterprises Association, annual improvements in 11 out of 12 key economic indicators were reported. A general feeling of optimism is apparent in the results, with a welcome indication of jobs’ growth, though issues in certain sectors such as retail and exports were reported. Seven of the 12 indicators have showed sustained improvement in every quarter of 2013 and all indicators except for current exports have improved on the same quarter of 2012.
Business confidence has increased from -5% to +42% and business expectations have gone from 0 to +52% in the space of a year. Economic uncertainty is now at the lowest level since Spring 2007 and continues to be the biggest concern for employers. Sales expectations in December 2013 are a very positive 28% but this confidence is not felt across all sectors, most notably Retail, where sales expectations dropped to -35% from -23% in the final quarter. Both current and future employment experienced relatively strong increases in this quarter, in line with current and future sales. Current Investment remained static at 26%, a sign that, though economic recovery appears imminent, owner-managers are still unable to gain sufficient access to credit to expand and grow their businesses.
Manor West Retail Park, the award winning shopping centre and retail park in Tralee, Co. Kerry is one retail centre that has reported a good Christmas spending period and predicts further growth in 2014.
The retail park has just entered its second year at 100% occupancy; and shopping centre manager, Derek Rusk is forecasting another good year for retail at the centre in 2014. The retail park, since it first opened in 2001, has consistently been placed in the top three shopping centres nationwide, attracting the best national and international brands, employing over 800 people, and enticing over 90,000 shoppers to the retail park on a weekly basis, a figure that has rose to over 120,000 a week in the run up to Christmas.
Derek Rusk, who has been centre manager since the retail park first opened its doors over 12 years ago said: "Footfall has shown a marked increase year on year from late August on, and tenants are already reporting that Christmas 2013 was one of the busiest yet."
Adding to the good news retail story, he added: "Levels of enquiries for new units and kiosks, as well as promotional spots have increased exponentially since August, and in the month leading up to Christmas three new businesses moved in, increasing footfall even more. These new additions to the centre are international retailer Claire’s, "Flowers at Manor West", and one of the new National Driver Licence Service Centres. All of this bodes well for the future and is giving people more reasons to come and visit the retail park. It has been an extremely challenging time for retail in Ireland but I have seen first-hand a greater spirit of consumer confidence on the ground in the shopping centre and retail park, and 2014 has all the signs so far of being a strong one for us here in Manor West and for Tralee in general."
Rusk added: "There is an air that the "heavy lifting" of the past few years is hopefully out of the way and that consumer confidence is creeping back in. We are seeing this in foot fall and dwell time, and at long last at the tills. We are going into 2014 with a quiet confidence that we haven’t seen in years."
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