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Do strong coffee sales mean the economy is getting better?

Retail Excellence Ireland says that hot beverage sales are an indicator of a stronger employment market.

Image: Shutterstock

SALES OF HOT beverages are up by almost 8% in the second quarter of the year, providing a strong indicator of employment, Retail Excellence Ireland said.

“The reason we track it is because it’s a really good indicator of footfall and employment”, REI chief executive David Fitzsimons said.

The number covers high street retail chains like Insomnia as well as forecourt outlets including Applegreen and Topaz.

Hot beverage Source: Retail Excellence Ireland

However, despite the positive sales of hot drinks, overall numbers for the second quarter showed only a slight increase on 2013, reflecting the challenging environment for retailers in the country.

Overall like-for-like sales were up just under 2% on average, with sales figures boosted by Easter falling in April and relatively good weather during the second quarter.

Fitzsimons said: “The big point of difference between this quarter and last quarter is the weather. I’d love to say its employment or sentiment but its not.”

The leading sales segment was unsurprisingly among Garden Centres, while camera sales declined by a whopping 28%.

Budget

Fitzsimons called on the Government to preserve the 9% VAT rate in a bid to stoke consumer spending, and also to target reliance on social welfare in the hope that it will encourage people back into the labour market.

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“You have pockets of unemployment of up to 20% and employers are saying they can’t find people to come and work for them.”

He also called for a decrease in tax rates in order to put more money back in consumers’ pockets.

Finally, he said that a scrappage scheme for white goods, such as dishwashers and washing machines, would encourage people to trade in older machines that are less water-efficient, and hence more costly once water charges come in.

Read: Two-speed recovery underway with consumers unconvinced by economic ‘upturn’>

Read: One in four people are struggling to make ends meet>

About the author:

Jack Horgan-Jones

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