The impact of Brexit could make for a gloomy Christmas for retailers after latest indications of a slowdown in the sector ahead of the festive period.
Retail Ireland, the Ibec group that represents the retail sector, said its Retail Monitor for the third quarter of this year showed a fall in consumer sentiment and a slowing down in sales.
Retail Ireland said the Government now needed to prioritise support for the sector and take steps to ensure shifts in currency do not hamper the economic recovery and the jobs associated with it. Adding a warning over wages, it said there needed to be “a renewed effort is needed to keep labour, energy, regulatory and insurance costs in line”.
Retail Ireland director Thomas Burke said: “While sales values grew by 1.1% in the third quarter of the year when compared with the same period last year, the steady decline in growth rates quarter on quarter is a cause for concern.
“The 23% slump in the value of sterling since the beginning of the year has prompted more consumers to travel North to shop, with new figures also showing a surge in online shopping in the months following the UK vote. Central Bank statistics show that e-commerce transactions recorded on Irish debit and credit cards jumped by 20% from €1bn to €1.2bn between July and September as sterling fell. This was way above trend and is likely to have mostly gone to UK based online retailers.”
He said the Irish retail sector was working to adjust its prices even though it was still selling products that were purchased at a much different exchange rate a number of months ago.
Mr Burke said retailers were squeezed by consumers demanding price reductions and UK-based suppliers seeking price increases.
In department stores, despite total sales values increasing by 1.5% compared to Q3 last year and total sales volumes rising 2.3% over the same quarter last year, the devalued sterling exchange rate has driven Irish shoppers across the border and online to UK-based websites, while there has been a decline in UK tourist spend.
The pharmacy sector grew by 1% in value terms and 1.3% in volume in Q3 compared to last year, but RI said the overall growth was driven by modest prescription volume growth and strong over the counter healthcare sales due to an extended hay fever season.
The third quarter was broadly positive for the DIY and hardware stores, but the books, newspaper and stationery market was disappointing with CSO data suggesting the market was down 5% in both volume and value. As for supermarkets and convenience stores, sales values and volumes were up 2.5% and 3.1% versus last year.
Meanwhile, a dispute between the the Musgrave group and Unilever is over.
The country’s largest grocery group and Unilever had been at loggerheads over pricing but in a joint statement both said: “Following a satisfactory conclusion to recent commercial discussions, Musgrave and Unilever are pleased to confirm that supply of all Unilever products to all Musgrave stores recommenced on Monday.”
By Noel Baker for www.irishexaminer.com