Retail sector is still facing serious challenges
CSO figures show prices have been cut “across the board” according to Retail Ireland. Unfortunately for retailers, rents have not been reduced accordingly.
26 January 2010 | 0
Recent figures published by the Central Statistics Office revealed that the volume of retail sales, excluding price effects, decreased by 8.2% in the year to November 2009, or by 5.9% if car, fuel and bar sales are excluded. Retail sales value declined by 12.9% in the same period, or by 11.2% excluding car, fuel and bar sales.
While all sectors showed year on year volume decreases, the worst affected were: non-specialised stores, including supermarkets (-2.1%); clothing, footwear and textiles (-2.3%); household equipment (-10.8); bars (-12%); and motor trades (-24.5%).
The Consumer Price index showed a 5% drop in consumer goods prices in the year to December 2009, compared to a decrease of just 1.2% the previous year. The CPI drop is twice the EU average, as the EU Harmonised Index of Consumer Prices measured a decrease of 2.6% for the same period.
The greatest price reductions recorded include: housing, water, electricity, gas and other fuels (-21.2%); clothing and footwear (-14.7%); food and non-alcoholic beverages (-8.1%), and furnishings, household equipment and maintenance (-4.8%). Price increases were noted in education (+11.3%), miscellaneous goods and services (+5.4%), health (+2.5%), transport (+2.1%) and alcoholic beverages and tobacco (+1.2%).
Commenting on the CSO data, director of Retail Ireland, Torlach Denihan said the figures show that prices have been cut “across the board” and consumers are getting more for their money. However, despite the price decreases and subsequent “squeeze” on retail margins, rents have not been reduced accordingly.
“With retailers taking in less money at the tills, the employment prospects for the sector are a source of very serious concern,” said Denihan, who called on the Government to address rent and pay issues before “many more retail staff will join the 30,000 retail employees who joined the Live Register in 2009.”
On a more positive note, the decline in supermarket volume sales eased to 2.1% in November 2009, from a rate of twice that
(4.3%) in the first half of the year. Annual supermarket volumes were down 3.7% and turnover value was down 5.9%.