Retail sales fall for eighth month in September

Retail sales declined for the eighth month in a row in September to bring the annual decrease to 6.2 per cent, according to figures released by the Central Statistics Office (CSO) this morning.

The annual rate of decline remains near the 24-year lows recorded in August last when retail sales fell by a revised figure of 6.4 per cent.

The fall in retail sales during the three month period to September was 5.6 per cent, the largest annual decline in the volume of quarterly sales since 1983.

If motor trades are excluded from the overall annual rate, then an annual decrease of 5.7 per cent would have been recorded.

The value of retail sales also decreased in the year to September, falling by 3.8 per cent. This is the sixth consecutive monthly fall in retail sales values. In September alone the fall was 0.6 per cent.

Alan McQuaid, chief economist with Bloxham Stockbrokers said the retail sales suggest the risks to GDP forecasts "remain clearly to the downside".

He said the Government should have introduced fiscal stimulus measures in the Budget. "Instead, what we got was an income levy and increase in the standard rate of VAT, which will make Irish goods more expensive at a time when there is already a mass exodus from the Republic across the border to avail of cheaper prices in the North".

The strength of the euro against sterling at the moment would compound this he said.

According to detailed figures for the June to August period sales of household items such as furniture and lighting have seen some of the sharpest falls, dropping 14.6 per cent.

Mr McQuaid said the higher than normal numbers of sales in shops indicated attempts by retailers to lure into consumers.

A number of reasons have been identified for the weaker consumer spending, including a drop in disposable income due to high consumer price inflation and job losses.
He said construction employment was down 18.6 per cent in September.

Mr McQuaid said while easing inflation next year would boost disposable income, the weak jobs market would depress overall spending

"We expect another year of negative personal expenditure in 2009, though maybe not as bad as 2008 all things considered."