With less than three weeks to go before Christmas all the key indicators are pointing to the best shopping season since the economic crash in 2008 and possibly the cheapest since 2001, according to a report published on Monday.
The Retail Ireland annual report shows the fashion, footwear, electronics and furniture sectors performing strongly while intense competition between supermarkets means plenty of food and drink bargains for consumers.
The monitor from the Ibec group that represents the retail sector says that with supermarkets fighting hard for footfall, prices across the main chains could fall to levels in December not seen since 2001.
It tracks key trends across the economy and the sector to give an insight into how they are likely to impact the key Christmas trading period.
The monitor shows that €4,050 million is likely to be spent in shops in December up from €3,920 million in 2014. This represents an annual rise of over 3.5 per cent. Irish households will spend an average of €2,450 this December, which is approximately €600 more than any other month of the year.
Key indicators set out in the Christmas Retail Monitor include retail sales in the first ten months of this year which are up 2.3 per cent in value terms on the same period in 2014.
Rising employment means that more people have more money to spend. In the third quarter of this year the employment market reached 1.98 million people, the highest level recorded since early 2009. Retail Ireland’s most recent forecasts suggest that there will be in the region of 59,000 extra people at work since last Christmas.
Disposable income is growing again, but remains behind 2008 levels. The total disposable income levels at the end of last year were still down 10 per cent on 2008. The gap will have closed somewhat in 2015, but not entirely. Budget 2016’s USC cuts and other measures will likely result in average take home pay increasing by 1.5 per cent next year, the umbrella group said.
Combined with measures adopted in the previous two budgets, most earners now stand to be between 1.5 per cent and 3.5 per cent better off from January than they were in 2014.
“Consumer sentiment has soared by over 10 per cent in the first 10 months of 2015,” the report says. “The positive correlation between enhanced consumer confidence and retail sales performance indicates that spending should continue to improve throughout the coming months.”
Competition remains intense in the supermarket sector and this is keeping prices down. “At present, goods inflation is at minus 4 percent annually as shops battle for footfall. Goods prices this December are on course to be at their lowest level since December 2001. Downward price pressures will continue into the post-Christmas sales period.”
"Irish retailers are optimistic as we head into the hectic Christmas period," Retail Ireland Director Thomas Burke said.
“The next few weeks are by far the most important trading period of the year and key indicators are pointing in the right direction. More people are at work, disposable income is rising and the Irish consumer is more positive about the future.”
“The recovery is not evenly distributed across the retail industry,” he continued. “Categories such as electronics, fashion, footwear and furniture are all outperforming the market. Growth in other categories such as books, news and stationery and grocery remains weak. Consumers’ continued demand for value is evidenced in the difference between the growth in retail sales volumes and values. This is particularly evident in the grocery sector. Volume growth is running at over three times value growth and is a further sign of widespread discounting in Irish stores. While not ideal for retailers, it’s great news for Irish consumers as they continue to hunt for Christmas bargains.”
