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Cars, furniture and electrical goods: These are a few of our favourite things

Products that people stopped buying during the recession are back on shopping lists.

UPDATED 4.25pm

IRISH PEOPLE ARE spending more money on cars, furniture and lighting, and electrical goods as stores that took a big hit during the recession start hearing the cash registers ringing again.

But sales of food, drinks and cigarettes have fallen in a hole, and business groups are worried the burden of water charges and other extra costs will stop people buying anything more than the essentials.

The latest retail sales figures from the Central Statistics Office (CSO) showed overall retail spending was up 3.8% in the year to September, although there was a slight drop on the August results.

The number of sales was up slightly for the month, but that was only thanks to a big increase from the motor trades sector, which includes car and motorbike sales and maintenance.

Over the last year, spending on motor trades has been up 19.7% – the best-performed retail segment in the country.

Furniture and lighting sales were up 13.4% and “other retail sales”, a category which covers everything from carpets to sporting goods and toys, grew 15.4%.

But the results reflect bad news for retailers in the food, beverage and tobacco industries, whose turnover dropped 5.7% over the past year despite a slight bump in their September performance.

Cars are flying off the lots (not literally)

Booming car sales have been carrying much of the growth in overall retail business since mid 2013, with the industry body for Irish traders reporting a near-30% increase in turnover for the first nine months of 2014.

CSO1 Source: CSO

Meanwhile, tobacco sales can expect to take a further hit after the government put up taxes on cigarettes in its recent Budget on the back of earlier increases.

But drinks tariffs were left alone following tax rises in several previous years.

Recession victims making a comeback

In a research note today, Davy chief economist Conall Mac Coille said all the retailers which had been hardest hit during the recession were the ones now enjoying the sharpest bounce in their sales.

“Nonetheless, the concern is that weak nominal wage growth has held back the rebound in Irish consumer spending in the second half of 2014,” he said.

Mac Coille said the sectors which had suffered the least during the downturn, such as food and beverages, were under performing as the economy recovered.

Retail Ireland chairman Conor Whelan said the modest growth figures showed consumer confidence was rising, but not all businesses were benefiting.

Specialist outlets like butchers, bakeries and off-licenses also had their sales drop compared to last year’s figures.

Water charges weigh heavily

Irish Small and Medium Enterprises Association (ISME) chief executive Mark Fielding said that despite some positive indicators the small-business sector was still faced challenges.

He said the added bills from water charges and property taxes were weighing heavily on consumers.

“While there were no tax increases on either alcohol or fuel (in the Budget), the increase in taxes on cigarettes will drive further black market activity in this sector resulting in a loss of revenue for both retailers and the government.”

READ: ‘Tsunami’ of problems trip up retail sales in slow March >

READ: Cars, medicine and books all down as retail sales fall >

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About the author:

Peter Bodkin  / Editor, Fora

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