Retail sales rebound by record 29.5% in May

Retail sales jumped by a record 29.5 per cent in May when compared with April as the government partially lifted restrictions put in place to curb the spread of coronavirus.

This was the largest monthly increase on record, the Central Statistics Office (CSO) said, and follows a near 36 per cent collapse in April as the impact of the Covid-19 crisis on the retail sector took hold.

On an annual basis, retail volumes were still 26.6 per cent lower than the same period last year. Nonetheless the rebound is encouraging news for the sector, which has been one of the worst hit.

When motor sales are excluded the volume of retail sales increased by 9.3 per cent in May 2020, over the previous month, and decreased by 16.2 per cent when compared with May 2019.

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Many retail outlets remained closed in May with the exception of essential retail sectors.

Under the government’s phased lifting of restrictions, hardware stores, car showrooms, opticians, bike shops and garden centres were allowed to reopen on May 18th.

Among the sectors showing the largest month-on-month increases were car sales, which rose by 153.9 per cent; hardware, paints and glass (92.5 per cent ); furniture and lighting (85.9 per cent); and other retail sales (69.3 per cent).

However, several sectors, many still under lockdown, registered further declines, including books, newspapers and stationery (-35.7 per cent ); pharmaceuticals, medical and cosmetic articles (-2.2 per cent); and food beverages and tobacco (-1.9 per cent).

Caution

KBC Bank economist Austin Hughes cast a note of caution.

“A strong but not surprising increase in Irish retail sales in May still left spending markedly below pre-Covid-19 levels. While the headline month-on-month gain of 29.5 per cent goes some significant way towards reversing the 35.8 per cent drop seen in April, this is notably the result of a pick-up in car sales in May from a negligible number in April.

“As several key Federal Reserve and European Central Bank officials have said in recent weeks, looking at monthly changes in isolation may give a very misleading sense of current economic conditions,” he said.“ In this context, the bounce in Irish retail sales in May represents only a small recovery of earlier losses.”