Retail sales rise despite cost-of-living squeeze

Retail sales rose in April as car sales increased and consumers spent more in bars and on clothing and footwear. Despite the threat to real incomes from higher inflation, the volume of retail sales was 3.8 per cent higher on a monthly basis in April and up by 6.1 per cent on an annual basis.

The Central Statistics Office (CSO) said several sectors showed “very large annual increases” compared with April last year, when a full lockdown of non-essential retail and services was in force due to Covid-19.

Bar sales jumped by 531 per cent compared with the same month last year when bars were closed except where there were ancillary services. Despite this large recovery, bar sales remained almost 25 per cent down on pre-Covid February 2020 levels, the CSO noted.

Other sectors showing large annual increases were clothing and footwear (up 282 per cent) and department stores (up 117 per cent), reflecting a recovery from a very low base in April 2021. On a monthly basis, the CSO said the largest volume increases in sales in April were in car sales, which rose 33 per cent. The largest decrease on a monthly basis was in department stores, where sales fell by 42.5 per cent.

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Higher inflation poses a significant threat to real incomes, which is expected to curb consumption in the coming months. Several agencies, including the Central Bank, the Department of Finance and the Economic and Social Research Institute (ESRI) have downgraded their headline growth forecasts in recent weeks on the back of weaker consumption growth.

The CSO said the volume of retail sales was 9.7 per cent higher in April 2022 than pre-Covid levels in February 2020. However it noted that several sectors have still to recover to pre-pandemic levels, including department stores (down 40.9 per cent); books, newspapers and stationery (down 27.5 per cent) and bars (down 24.4 per cent).

The proportion of retail sales transacted online (from Irish registered companies) was 4.8 per cent in April compared with 5 per cent in March, 10.1 per cent in April 2021 and 15.3 per cent in April 2020. The CSO figures do not capture the proportion of Irish retail sales being transacted with non-Irish registered companies.

The CSO figures also show that the value of sales in the fuel sector jumped by 30.4 per cent in the year to April reflecting higher energy prices internationally.