Retail sales volumes 6.2% lower in September

SHOPPERS STAYED away from the tills again in September, with the volume of retail sales continuing to decline at levels not seen since the early 1980s.

Figures from the Central Statistics Office (CSO) show that retail sales volumes were 6.2 per cent lower in September than they were in the same month of last year.

The annual drop of 5.6 per cent in sales volumes in the third quarter is the largest annual decline in quarterly retail sales since 1983 - the year in which the Irish economy was last in recession.

After a washout August in which spending by tourists failed to make up for the dampening effect of Irish consumers' overseas holidays, retail activity picked up only slightly in September, with volumes growing by 0.5 per cent on a monthly basis.

This broke a cycle of seven consecutive months in which the volume of sales fell.

But the annual rate of decline remains close to the low recorded in August last when retail sales fell by 6.4 per cent.

An improvement in motor sales was the reason that September volumes grew.

Car sales grew 2.4 per cent month-on-month. However, this followed a particularly weak month in August, said Ulster Bank economist Lynsey Clemenger.

"Motors will continue to be a drag on total retail sales for the foreseeable future," she said.

Furniture and lighting sales are down almost 20 per cent year-on-year, and electrical goods sales are down 16 per cent due to the collapse of the housing market.

Pubs are also suffering, with a 9.1 per cent annual decline in bar sales.

Davy Research economist Rossa White said it appeared that there had been another "mini-sale" at some retail outlets in September, as the value of retail sales, which includes price effects, grew by just 0.6 per cent in the month, suggesting little or no price inflation.

"Discounting at this time of year is unusual, but it is a response to weak demand," Mr White said.

Consumer spending is likely to drop almost 3 per cent in 2009 as unemployment rises, he added.

The Christmas spending period is now critical for retailers and the wider economy.

Alan McQuaid, economist at Bloxham Stockbrokers, said the "extremely disappointing" retail sales figures made it clear that the Government should have introduced fiscal stimulus measures in the Budget.

The exodus of shoppers availing of cheaper prices in Northern Ireland would increase in the run-up to Christmas, especially given the weakness in sterling, Mr McQuaid added.