Retail sales edge higher in May on hardware buys

Friday 28 June 2013 15.45
Overall retail sales edge higher in May, but car sales slow by 5.5%
Overall retail sales edge higher in May, but car sales slow by 5.5%

New figures from the Central Statistics Office show that the volume of retail sales rose by 0.1% in May when compared to the previous month. But sales were down 0.7% on an annual basis.

The CSO said that when car sales are excluded, the volume of retail sales rose by 1.4% on a monthly basis, while there was no change on an annual basis.

Breaking down the figures, they show that sales of hardware, paints and glass rose by 14% last month.

Sales in specialised food and beverage stores grew by 5.2% and clothing and footwear sales increased by 3.8%.

The biggest fall was seen in the motor trade, with sales down 5.5% as potential buyers put off their purchases until the introduction of the new 132 licence plate in July.

Sales of books, newspapers and stationery also declined by 3.9% month on month.

Commenting on today's figures, Merrion economist Alan McQuaid said that in overall terms, the retail sales data for January-May are a clear indication that consumers still remain very cautious.

''As we saw with the official GDP numbers for the first quarter yesterday, consumer spending posted its largest fall since 2009 in the first three months of the year, though some of this may have been weather related. The figures since then point to some improvement, though still nothing to get too elated about,'' he added.

Investec economist Philip O'Sullivan noted that May was the first month to have recorded a month on month improvement in underlying sales in either value or volume terms in the year to date.

He said that while yesterday’s National Accounts release revealed a weak private consumption outturn in the first quarter of 2013, the second quarter may see a more resilient outturn.

One interesting feature of the latest retail data was the increased use of discounting to drive sales volumes, Goodbody economist Dermot O'Leary said.

He noted that in May, the prices of core retail sales fell at an annual pace of 1% - the fastest rate of decline since 2010. He said this highlighted the difficulty that retailers still face in Ireland.