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Tuesday, November 29, 2022

Retail sales stall in May as consumers grapple with rising costs

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According to the latest data from the Central Statistics Office, retail sales volumes remained unchanged on a monthly basis in May and were up 0.3 per cent over the same month last year.

That number shows no sign of a consumer-led spending trend as the first restrictions-free summer since the start of 2019.

In April, retail sales volume climbed 4.1 percent compared to March, the strongest monthly sales in more than a year.

However, post-lockdown, there is no prospect of an uptrend as inflationary pressures are building up. Irish inflation hit 8.2 percent in May, slightly higher than the EU average of 8.1 percent.

Retail sales were also down in May, the first decline this year excluding car sales expenses, down 0.1 percent on a monthly basis.

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In May, department store sales grew a fifth compared to April, while sales of electrical goods and hardware, paint and glass saw growth of 9.2 pc and 6.5 pc respectively.

However, the furniture and light categories registered a decline of 22.3 per cent in the previous month as compared to April. Sales of clothing and footwear also declined by 21 per cent as compared to a month ago.

A bright spot is bar sales, which skyrocketed by 769pc compared to May last year when pubs were still under lockdown. Despite the recovery, sales are a quarter lower than pre-pandemic figures in February 2020.

Sales of books, newspapers and stationery also grew by 107 percent over the year.

The rising cost of fuel was also reflected in the report. While the sale price of fuel rose by 27.2 per cent in May, sales declined by 0.5 per cent due to cuts by consumers.

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Online sales for May rose 1.2 per cent to 6.1 per cent. This was slightly higher than the figure recorded in May 2021, but 7 per cent lower than in May 2020 when Ireland was in lockdown.

Last month, Irish supermarkets reported a 9.3 percent increase in online spending, according to Kantar. This was likely linked to a desire to travel less to save fuel.

Despite the lack of growth in May, retail sales last month proved to be 7.2 per cent higher than the pre-pandemic levels reported in February 2020.

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