The fourth quarter of 2011 proved to be another tough period for the Irish retail industry due to significantly weakened consumer sentiment, new figures show.
Retail Excellence Ireland's retail industry performance review of the last three months of 2011 show that overall sales levels fell by an average of 1.58% compared with the same time last year. This compares with falls of over 6% and 3% in the third and second quarters respectively.
The REI survey shows that the average transaction value continued to decline, with an average fall of 4.9% across all sectors due to promotional activity and very significant competition.
Sales in December rose by 1.82% compared to the same time in 2010, when retail sales were hit by the severe winter weather. Retail Excellence Ireland says that December was the first month to show like-for-like growth since March 2008.
REI says that October was a very 'challenging' month with sales down by an industry average of 6.25%. However, the trading environment saw a good improvement in November with sales down a marginal 0.64%.
The survey notes that furniture and flooring and jewellery were the worst performing sectors in the final quarter of last year, falling by 5.7% and 4.75% respectively. REI said these declines are due to the continued stagnation in the housing market and the trend of consumers choosing more conservative gifts.
The survey shows that garden centres and menswear were the best performing retail sales categories in the fourth quarter, with sales up 4.75% and 1.78% respectively. Garden centre sales improved due to the mild autumn and winter weather compared to 2010, while menswear sales were boosted by the buying of seasonal clothes.
REI's chief executive David Fitzsimons said that he expects to see a number of major announcements this year regarding the rationalisation of many stores. In some cases some retailers may close down completely, he added.
''It is likely that banks will become more actively engaged in debt resolution in the retail industry - in some cases mandating liquidations and in other cases selling the debt to third parties,'' he said.
He also urged the Government and local authorities to help protect retail jobs by reducing commercial rates.
Retail Excellence Ireland has over 9,000 store members, employing over 110,000 people.
