Motor sales drive 6.2% retail growth

By Peter O'Dwyer

Strong motor sales drove a 6.2% increase in the volume of retail sales in May, compared to the same period last year. This represents a 0.9% monthly increase from April of this year, according to figures released by the Central Statistics Office (CSO).

Excluding motor sales, a decrease of 0.5% was recorded, compared with April 2014. This, according to Davys stockbrokers chief economist Conall MacCoille, is understandable given the strong growth the previous month.

“Today’s data suggests that the recovery in Irish retail spending evident in early 2014 has been sustained into the second quarter of the year. Retail sales rose by 0.9% in May and by 6.2% year-on-year.

“Excluding car sales, retail spending fell by 0.5% in May; however, following a strong 1.9% rise in April, it is still up 3.4% year-on-year,” said Mr MacCoille.

Increased car sales of 20.3% have contributed heavily to a reversal of fortunes in Irish retail spending this year.

Excluding the motor trade, retail spending looks set to rise by about 1% in the second quarter of this year which would represent a fifth consecutive quarter of growth, according to MacCoille.

The figures also show an increased tendency for consumers to spend their cash on larger-scale investments — a thought also echoed by Retail Ireland director Stephen Lynam. “Leaving car sales aside, there was strong growth in the sale of clothing and footwear, furniture and lighting and electrical goods. This suggests that consumers who shied away from buying certain ‘big ticket’ items are now starting to purchase them,” said Mr Lynam.

Despite the increase in sales, the Irish Small and Medium Enterprises Association (Isme) warned that retail sector costs continue to rise and immediate government intervention was necessary.

“Government must take immediate action on rates and local charges and force local councils to implement cost reductions,” said Isme chief executive Mark Fielding. In particular, Mr Fielding said the level of employer’s PRSI — which reverted to 8.5% from 4.25% in January of this year — is having a detrimental effect on businesses and putting jobs in jeopardy.