MAJOR IRISH retailers are positive about the future for the sector despite the drop-off in consumer spending, according to research published today.
A survey of major players in the clothing, fashion and general merchandise sector by PricewaterhouseCoopers (PwC) found that 57 per cent of respondents rated their outlook for the sector as either neutral or positive.
Building on this positive outlook, 54 per cent said they are planning store expansions in the next 12 months, while 15 per cent said they are looking at merger or acquisition opportunities.
Despite the positive sentiment, PwC notes that the sector still “has some way to go to recovery”.
The latest figures from the Central Statistics Office show that year-on-year retail sales were down by 15 per cent in July, but there were some signs of a slowdown in the decline as sales were up 0.2 per cent on June.
Commenting on the figures when they were released earlier this month, Alan McQuaid, chief economist with Bloxham Stockbrokers, said rising unemployment was being reflected in negative consumer sentiment.
“Although there has been some improvement in sentiment regarding future prospects, albeit from historically low levels, which may provide some support for consumer demand, it is unlikely to outweigh the effect of the decline in disposable incomes,” said Mr McQuaid.
The key challenges that retailers said they were facing were maintaining margins, responding to consumer demand, increasing indirect costs such as rent and rates and lack of available credit.
The vast majority of those surveyed (86 per cent) said the overall cost of doing business in Ireland is too high.
“Retailers have a lot of cost embedded in their business but now they are looking at what are the good versus the bad costs,” said David McGee, director of PwC’s advisory business. “Good costs are those which are adding value and the consumer wants to pay for.”
The survey was carried out at a networking event that PwC held last week for the retail sector. Respondents were either managing or financial directors of the retailers.