Hot beverages best performing retail sector in Q4 2012
With sales up by +4.23% in Q4 2012, the hot beverage sector has demonstrated solid growth
Print28 January 2013
Hot beverages were the highest performing sector within the retail industry during Q4 2012 according to the latest figures from Retail Excellence Ireland (REI).
The organisation says that hot beverage sales rose by +4.23% compared to Q4 2011, indicating that footfall held up well during the period.
Felim Meade, director of a chain of family restaurants based in the greater Dublin area, Graham O’Sullivan Ltd, said: "The figures are strong when compared to last year. There has been none, if very little price increases in the sector. Discounting beverages and bundle offers discounting coffee greatly slowed down in the latter half of 2012, so these figures would indicate solid growth across the sector"
Home and giftware was another top performer during the final quarter of last year, with sales up by +2.18%. Meanwhile the worst performing sectors for Q4 included furniture and flooring (-2.12%), ladies fashions (-1.31%) and pharmacy (-1.29%).
Groceries ‘difficult to predict’
Meanwhile the grocery sector also recorded a marginal increase in sales, growing by +0.04% during Q4 last year.
Eric Champ, managing director of Champs Eurospar in Killorglin, Co Kerry, said:"It would be remiss at this stage to speculate that sales are increasing. Before Christmas, certain products were reduced greatly which may have boosted sales but very little profit. People bought at Christmas; though they may still be paying for it. January has been a very quiet month. It’s very hard to predict what’s going to happen next"
Overall, year-on-year sales levels increased by an average of 0.21% during the fourth quarter of 2012.
Retail sector remains fragile
REI’s figures show November proved to be the most challenging month of the quarter, with sales falling by -0.17% year-on-year. Pre-budget speculation in October, which caused a decrease in consumer sentiment, was the main reason for this.
The month of December saw an improvement, with Irish retailers reporting an increase of 0.31%.
REI chief executive officer, David Fitzsimons, said: "The slight increase in retail sales during Q4 2012 is very welcome; however the sector still remains fragile. It is no surprise that December saw an increase of 0.31% due to the budget announcements complete and consumers regaining confidence to spend again.
"It is noticeable that many retailers discounted in December to generate sales, thus while consumers responded to value, the retailer suffered margin erosion," he added.
CSO’s Retail Sales Index shows growth in food
Retail Ireland, the IBEC group that represents the retail sector, has also welcomed a rise in retail sales, but said the recovery is very fragile and should not be taken for granted. The CSO’s Retail Sales Index showed annual growth in the volume of sales for department stores, supermarkets and food, but falls in furniture and lighting, and clothing and footwear. Overall, the volume of December’s retail sales, excluding motor sales, was up 0.8% compared to December 2011.
Commenting on the figures, Retail Ireland chairman Frank Gleeson, said: "After the anecdotal positive reports over Christmas, the official statistics released today are welcome. They show a large fall in car sales, but once these are factored out, sales rose slightly. While these are relatively positive results, total retail sales are down about 25% since the start of the recession. We have a long way to go before the retail sector returns to health.
"We had a rise in retail sales in December of 2011, only to see those sales fall back again in the first half of last year. To ensure this is not repeated, it is vital that Government take steps to boost consumer confidence and reduce retailer costs. Otherwise we could have a return to falling spending, with a damaging impact on the domestic economy and employment."
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